Pioneer Foods has laid its cards out in front of KWV

Pioneer Foods has laid its cards out in front of KWV

Pioneer Foods has made a "firm expression of interest" to acquire wine and spirits group KWV Holdings.

The South African firm, which began lining up a bid for KWV last month, confirmed yesterday (2 December) that it is looking to buy KWV for ZAR12 a share, valuing 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 told the Johannesburg Stock Exchange yesterday.

KWV has subsequently appointed a sub-committee of directors to ensure appropriate governance will be followed, and to consider a possible firm intent offer. An independent expert has also been commissioned to provide impartial advice should the proposed transaction proceed.

The two firms already share three directors who sit on both boards - Jannie Mouton, Antonie Jacobs and KWV's chairman, Thys du Toit.