Barloworld set to delist from JSE and A2X after PIC agrees to sell its 22%
Barloworld had opted to restructure its operations at Ingrain and realigned operating costs to match current levels of activity under its equipment operations for Southern Africa. Picture: Supplied
Image: Supplied
A complicated buyout of Barloworld is now set to go ahead after the Public Investment Corporation (PIC) agreed to sell its 22% stake in the equipment company for R23 billion following talks to resolve Africa’s largest asset manager’s concerns over corporate governance.
On December 11 last year, Barloworld disclosed that it had received an offer to buy the company outright, apart from shares excluded from the deal. The offer, by a company called Newco, will now own 46.93% of Barloworld following the PIC’s acceptance of the offer.
Barloworld will be delisted from both the JSE and A2X following the implementation of an empowerment deal.
In February, the PIC rejected the initial bid of R123.10 a share over “its concerns with corporate governance processes at the company.” The shareholder’s vote against the takeover triggered a Standby Offer, which it has now accepted.
Newco, effectively Entsha, was created for the takeover bid. It is owned by Barloworld CEO Dominic Sewela, his family, and by Gulf Falcon Holding Limited, a wholly owned subsidiary of Zahid Tractor & Heavy Machinery Company and a member of the Saudi Arabian Zahid Group.
It was Sewela’s involvement in the deal that triggered the PIC’s concerns. In response, Barloworld said that it had disclosed all material aspects and Sewela had recused himself from any board engagements on the deal.
In addition, the PIC was concerned about broader public interest responsibilities. Newco has committed to addressing these issues and will implement a 13.5% broad-based black economic empowerment transaction in Barloworld after the company is delisted from the JSE and A2X.
Sydney Mhlarhi, spokesperson for Newco, said: “The support of the PIC for the Standby Offer is another important milestone. This transaction is not only a demonstration of our belief in the business and confidence in South Africa as an attractive investment destination, but also our shared commitment to align with national interests to drive meaningful economic inclusion and equity.”
Mhlarhi added that by unlocking commercial value and placing ownership, leadership and opportunity in the hands of those historically excluded, it sets a blueprint for future transactions.
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