Quantum Foods, a South Africa-based poultry and eggs producer, has seen its share price rocket in recent weeks as various parties vie for a stake in the business.
The stock price has climbed 70% to 695 South African cents since 12 June, when Zeder Investments announced its intention to the Johannesburg Stock Exchange (JSE) to sell its 32.1% holding in listed Quantum to local poultry processor Country Bird Holdings (CBH). The deal went through days later valued at ZAR308m ((US$17.9m at the time).
Then on Tuesday (7 July), Quantum made an announcement to the JSE detailing interest from a number of parties in its shares, including a unsolicited bid in June by CBH to acquire the remaining shares in the business, but that offer has since been withdrawn.
Local media reports quoted CBH chief executive Marthinus Stander as saying the company withdrew its bid when it became aware of another interested party.
“We learnt that there was another party involved, and it was not our intention to get into a bidding war,” Stander said. “We are comfortable with our stake, Quantum is a great company with great management.”
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Quantum referred to “other third parties” – unrelated to CBH – that had also expressed an interest in purchasing shares in the poultry and egg business but “with no current intention of making an offer to shareholders to acquire the remaining shares”.
Quantum added in the JSE announcement: “Should these acquisitions be made, they may result in one or more of such third parties acquiring a strategic shareholding in the company.”
Under South Africa’s stock-exchange regulations – the Companies Act – a company or entity acquiring 35% of a business is required to make an offer for the remaining shares it does not already own. That would have been the case with respect to CBH had it not withdrawn its bid.
Therefore, Quantum added: “The company is not currently in receipt of any offer or potential offer to acquire all or a portion of the company’s shares and does not consider it necessary, nor appropriate, to publish a cautionary announcement at this time.”