Pioneer Foods and KWV confirmed today that their talks were off

Pioneer Foods and KWV confirmed today that their talks were off

KWV and Pioneer Foods have terminated Pioneer's attempt to take over the South African wine and spirits maker.

The two firms jointly announced earlier today (2 February) that the proposed deal, initially announced late last year, has been called off because more than 25% of KWV shareholders were against the transaction. KWV said it had received receipt of enough shareholders who were not in favour of the deal, and that the 75% vote needed to swing the deal would not be achieved.

Pioneer's bid was therefore no longer subject to any offer period as defined by the Security Regulation Panel (SRP). 

Separately, late yesterday KWV posted a 60% to 70% plunge in net profits for the last six months of 2010. Headline earnings were expected to be down by between 75 and 85%, with poor trading conditions in Europe and the strong rand being blamed.

Both KWV and Pioneer claimed that the termination of the transaction was not related to KWV’s business performance, or yesterday’s trading update.