South Africa’s Pioneer Foods has made a “firm expression of interest” to buy local wine and spirits group KWV Holdings.

Pioneer has indicated its interest in acquiring KWV for ZAR12 a share, which values the wine and brandy maker at ZAR827.8m (US$120m).

The offer represents a 10.9% premium on the weighted average trading price of KWV’s shares in the 30 days up to 13 October, when the company first indicated talks were taking place.

Pioneer is planning to acquire KWV partly with shares and partly with cash. A quarter of the total consideration, equal to ZAR206.9m, will be settled in Pioneer shares on the securities exchange, with the rest in cash.

A “number of conditions” now have to be looked at before Pioneer considers making a “firm intention offer” as prescribed by the local securities regulation code, the company said yesterday (2 December).