Israeli-led group's Clover buyout under threat
Publish date: 11 February 2019
Issue Number: 810
Diary: IBA Legalbrief Africa
The R4.8bn proposed buyout of SA’s biggest dairy company, Clover, by an Israeli-led group is under threat after protests by a pro-Palestinian activist group, says a Fin24 report. The SA company Brimstone, which is part of the bidding group led by Tel Aviv-based Central Bottling, is reviewing its role in the transaction, it said yesterday. ‘We have taken note of the widespread outrage in respect of Brimstone’s participation in the proposed purchase,’ the black-owned company said. The ANC had close ties to the Palestine Liberation Organisation during the apartheid era and Israeli interests are frequently the target of protests in SA. Brimstone says on its website that it has ‘impeccable empowerment credentials and a values-driven corporate identity’. The deal was opposed by Boycott Divestment Sanctions SA (BDS), a group with a history of anti-Israel activity. The acquiring group offered R25 a share for Clover, compared with a Friday closing price of R20. The investment vehicle is 60% owned by CBC, the owner of Israel’s Coca-Cola franchise. Brimstone’s stake is 15%.
The rest of the consortium seeking to take over Clover reiterated its commitment to the proposed transaction, easing concern that it may be scuppered by its empowerment partner. Business Day says Brimstone's new stance led to Clover’s share price dropping by the most since October. The Israeli company has a 59.5% stake in the consortium. Other members are Ploughshare Investments, which will acquire 10.9%, and IncuBev with 8.3%. Management is due to retain a 6.3% stake.