South African-listed diversified industrial company Bidvest Group has made an offer of Aus$6 per share to buy out minorities in Bidvest plc, its food service distribution subsidiary listed on the Luxembourg and Australian Stock Exchanges in which it has an 81% interest.
Announcing the offer on Monday, Bidvest Group chairperson Brian Joffe said commitments to support the offer had been received from approximately 92% of shareholders, including that of Bidvest itself. Bidvest intends to acquire compulsorily the interest of those minorities not accepting the offer, he added.
If it is successful, Bidvest plans to delist Bidvest plc from the Luxembourg and Australian Stock Exchanges and operate it as a wholly owned subsidiary of Bidvest Limited, he added.
Joffe said the offer is consistent with the group’s philosophy of 100% ownership of all its businesses and control of their cash flows, as outlined in the 2003 annual report.
“We have therefore decided to make the offer as a mechanism for obtaining absolute control of Bidvest plc, in line with our stated intentions, and to give Bidvest plc shareholders a certain cash exit that they may not otherwise be able to obtain, at a significant premium to the 12-month weighted average closing price.”
The offer of Aus$6 a share represents a premium of approximately 42% to the weighted average closing price of Aus$4,23 for Bidvest plc for the 12 months preceding March 4 2004. Shareholders have the option of being paid out in Australian dollars or the equivalent in pounds sterling.
The independent director of Bidvest plc, who has been advised by Carlton Corporate Finance, considered the terms of the offer to be fair and reasonable and would recommend that Bidvest plc shareholders accept the offer.
Bidvest plc operates in the United Kingdom and Australasia and comprises three businesses: 3663 First for Foodservice in the UK, Bidvest First of Foodservice in Australia and Crean First for Foodservice in New Zealand. All three are leading broadline food service distributors in the regions in which they operate.
Bidvest plc posted a 22% rise to 8,72 pence in headline earnings per share and a 24% rise to £24,7-million in operating income for the six months ended December 31 2003. This was achieved on a 14% gain in revenue to £785,8-million.
Bidvest has undertaken to safeguard employee rights should the offer become unconditional. Appropriate proposals will be extended to Bidvest plc staff with share options in due course. — I-Net Bridge