Associated British Foods has tabled an offer to acquire the shares in South Africa’s Illovo Sugar it does not already hold.
The UK-based food-to-retail group said today (8 February) it has issued a non-binding expression of interest for Illovo’s outstanding share capital. ABF holds 51.35% of Illovo’s shares.
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“ABF intends to make an offer of ZAR20 (US$1.2) per Illovo ordinary share, to be settled in cash to all other shareholders,” the Kingsmill bread and Twinings tea maker said.
ABF added: “At this stage there can be no certainty that the discussions will result in a transaction. A further announcement will be made in due course.”
Shares in Illovo increased on the news, rising from ZAR18 pre-announcement to ZAR19.9 per share at 14:29 GMT.
Illovo said its board – excluding ABF representatives – will appoint independent advisors to “assist the process”. It added: “Discussions, which are still at an early stage, would, if successfully concluded, affect the price of the company’s securities. Accordingly, shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made.”
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By GlobalDataIllovo Sugar is a large commercial sugar supplier. The group also manufactures pre-packed sugar marketed under the Illovo brand name in South Africa and Malawi, while in Zambia and Tanzania the company sells sugar under the Whitespoon and Bwana Sukari brand names.
