South African consumer goods producer Libstar has drawn interest from potential acquirers amid an internal review of the business.
In a statement today (16 September), the owner of dairy brand Lancewood said it had “received non-binding, indicative expressions of interest” from unnamed parties.
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In March, Libstar revealed it was evaluating “potential strategies through which to deliver meaningful value unlock for stakeholders”.
Libstar said the submissions covered the “potential acquisition of all Libstar securities currently in issue”.
The company said its board has “resolved to further evaluate” the interest but it cautioned talks with the “potential investors” are at an “early stage”.
The group added: “There can be no certainty that these engagements will ultimately result in a binding offer.”
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By GlobalDataLibstar’s disclosure came alongside the publication of its financial results for the first half of the year.
During this period, the Denny Mushrooms owner generated revenue of R5.95bn ($343.2m), a 6.6% increase compared to the same period the previous year.
Operating profit rose by 14.6%, reaching R230.8m. Total profit for the period increased by 8.7% to R90.7m.
Libstar said the “total defined market” in which its products compete declined during the first half of the year. The company pointed to “the relentless pressure on consumers, driven by ongoing food inflationary headwinds and constrained disposable income”.
However, looking ahead, despite the “prevailing macroeconomic headwinds”, the group expressed confidence in the “strength of its brands, customer partnerships, and operational fundamentals”.
As part of the review Libstar announced in March, the company set out plans to implement a shared-services framework for its ambient products business, focusing on wet condiments.
Additionally, Libstar said it would looking to make changes to its retail, snacks, and spreads divisions. The retail division, Rialto, along with Ambassador Foods (snacks) and Cape Coastal Honey (spreads), were to be combined.
In 2024, Libstar reported over R500m in impairment charges, resulting in an EPS loss for the year. The company recorded revenue growth of 3.1%, reaching R11.7bn. However, sales volumes declined by 3.2%,
