Barloworld extends R23bn buyout offer amid shareholder delays

The contentious buyout offer for Barloworld has been extended by more than six weeks because some brokers and financial services companies are delaying selling their clients’ Barloworld shares in support of the offer.

The stand-by offer for Barloworld shareholders to accept the R23 billion offer by Saudi Arabian firm Zahid Group in concert with Barloworld CEO Dominic Sewela, closed on Friday, again with insufficient shareholder support, but Barloworld’s independent board has extended the offer to June 30.

The initial offer for the international heavy industrial equipment and food and ingredient solutions group was first made in February 2024, but shareholders raised issues about transparency, possible conflicts of interest due to the CEO’s participation, and some shareholders wanted a better offer than R120 per share, while the shareholder vote failed.

“Barloworld…understands certain Barloworld ordinary shareholders have been unable to tender their shares into the standby offer through their CSDPs (Central Securities Depository Participants) or brokers,” the Independent Board said on Friday.

The company said it had received several inbound queries from its shareholders who indicated to their CSDPs or brokers that they wished to accept the standby offer, but had been advised that they would only be able to do so at “a later stage,” the board said.

The board stated there was “no lawful basis” for a CSDP or broker to delay accepting the standby offer on behalf of their shareholder client, and CSDPs and brokers “must review their processes to ensure that instructions in relation to the standby offer are processed without delay.”

In April, the Public Investment Corporation (PIC), Barloworld’s biggest shareholder with 21.93%, accepted the standby offer with additional conditions, but at the close of the offer on Friday, the bidders still held only 46.93% of the shares.

For the standby offer to succeed, it requires valid acceptances from at least 50% of the remaining shareholders.

“Barloworld ordinary shareholders are advised that, after careful consideration, and with Barloworld ordinary shareholders' best interests in mind, the Independent Board has… agreed to a limited extension of the acceptance date deadline to June 30, 2025, in order to allow additional time for Barloworld ordinary shareholders who wish to accept the standby offer to do so and to prevent the standby offer from failing on May 9, 2025,” the company said.

Barloworld’s share price closed 0.07% higher at R107.58 on Friday, a price that had risen from R88.67 a year ago.

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