Competition Tribunal gives greenlight to Capitalworks R907 million acquisition of Sovereign Foods

Sovereign Foods announced on 2 November that the South African Competition Tribunal has approved Capitalworks’ acquisition of Sovereign Foods.

In August, a firm intention to acquire a controlling interest in Sovereign Foods through a R907 million all-cash buy-out deal was made by Capitalworks.   The all-cash offer was priced at R12 per Sovereign Food share – a 33.33 per cent premium to the failed offer from Country Bird Holdings (CBH) of R9 per share in 2016.  Shareholders holding 68 475 881 Sovereign Shares, constituting 89.84 per cent of the total Sovereign shares in issue (including Treasury Shares) approved the buy-out in October.

‘This week, the Tribunal ruled the transaction was unlikely to prevent or lessen competition in the market.  We have also received a compliance certificate in terms of section 121(b)(i) of the Companies Act which was issued by the Takeover Regulation Panel,’ announced Chris Coombes, CEO of Sovereign Foods.

‘The Scheme is therefore wholly unconditional and Sovereign Foods’ delisting from the JSE will be implemented in accordance with the salient dates and times,’ he said.

The timelines include: 

Friday, 3 November 2017

Lodging of an application for the termination of the listing of the Sovereign Shares on the main board of the Exchange.

Tuesday, 14 November 2017

Scheme LDT, being the last day to trade in Sovereign Shares in order to be recorded in the Register to be eligible to participate in the Scheme.

Wednesday, 15 November 2017

Suspension of the listing of Sovereign Shares at the commencement of trade on the Exchange.

Friday, 17 November 2017

Scheme Record Date, being the date on which a Sovereign Shareholder must be recorded in the Register in order to be eligible to participate in the Scheme.

Friday, 17 November 2017

Latest date on which Scheme Participants must make an Election and deliver completed Application Forms (in respect of a Share Consideration Election) to the Transfer Secretaries, at 12:00.

Tuesday, 21 November

Scheme Operative Date, being the date on which the Scheme becomes operative and on which the Offer Consideration becomes payable to Scheme Participants.

Wednesday, 22 November

Expected termination of the listing of Sovereign Shares on the main board of the Exchange at the commencement of trade.

Coombes said: ‘From an operational perspective, it is expected that Sovereign Foods will be managed in a similar manner as it was managed before. No operational changes relating to the supply of product to our customers are expected nor any changes that will affect our employees, stakeholders, suppliers or local communities. Sovereign Foods remains committed to being a values-based organisation with any eye on local and international markets, and committed to lead the category through innovation, a deep value chain and the contribution of our people.’