Pioneer makes offer for KWV despite big fine
2010-12-09
KWV has received a proposal from its Paarl neighbour, Pioneer Foods, about the possible acquisition of KWV. This interest has been expressed despite the fines of R654 million payable by Pioneer Foods for uncompetitive behaviour in the bread industry. In Pioneer Foods’ annual report published this week, the company’s headline earnings have dropped by 62% for the book year. Without the fine, the earnings would have increased by 48% over the past year. Pioneer is offering R9 cash plus Pioneer shares worth R3 per KWV ordinary share, which amounts to a total of almost R828 million. The proposal will become a firm offer once KWV has completed an independent investigation on the fairness of the price offered and certain conditions have been met. André Hanekom, MD of Pioneer Foods, says KWV will fit in well with their existing interests like Ceres Fruit Juices. KWV chairman Thys du Toit said that KWV’s board was acting in the best interest of all its stakeholders by selling the company to Pioneer. “As an icon in the wine industry, and with a heritage of 92 years, KWV is deeply entrenched in the hearts and minds of the people of the Western Cape. The emotional ownership of the company is much broader than the shares in trade, and this is something that the KWV board recognises and respects,” du Toit emphasises. “KWV has a long and proud history, and is regarded as a national treasure by many of its loyal consumers.” “A fair and transparent process, that adheres to the best corporate governance practices, is the best way to ensure that all stakeholders will be considered in the possible transaction. “All shareholders will in due course have the opportunity to consider an offer - and vote on the acceptance or rejection of such an offer.” In the mean time, KWV is engaging as widely as possible with stakeholders, to ensure that there is clarity and understanding about the process and roles of different parties. “We need to ensure that we do the best for the business,” du Toit stated. “It is not even 18 months since KWV started flying solo, and we have made significant progress. “KWV is positive about exploring the potential synergies between its business and that of Pioneer Foods.”
More
News
|
