South African food group AVI has played down reports that it is open to takeover bids after the failure of Tiger Brands’ approach last week.
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Tiger walked away from its bid for AVI last Wednesday (4 March), citing deteriorated market conditions and unfruitful discussions that had been ongoing between the management of each company since October.
According to a Reuters report today, AVI has signalled that it is open to talks with potential buyers, including a fresh approach from Tiger.
However, a spokesperson for the company told just-food that while AVI’s management would consider whether any offer was in the best interests of its shareholders, the group is not actively seeking bids.
“At no time… did AVI signal a for sale sign. Being a listed company on South Africa’s main JSE board, the management and board of AVI have a duty to notify their shareholders in responding appropriately to each and every potential bid,” the spokesperson said.
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By GlobalDataAVI today booked a 19% jump in profits from continuing operations for the first half, which increased to ZAR3.62bn (US$34.2m).
However, in a statement to the Johannesburg stock exchange, the company warned that the South African trading environment was expected to worsen in the second half.
“Household disposable income is likely to remain constrained by relatively high interest rates and reduced access to credit,” AVI said.
Demand in the second-half is likely to be “dampened” because of global economic uncertainty, AVI warned.
