KWV Limited, South Africa’s second-largest wine and spirits producer and exporter, has concluded an agreement with a broad-based black economic empowerment (BEE) consortium in the local wine industry, Phetogo Investments, for Phetogo to make a share purchase offer of R1,85 per share to KWV Limited shareholders to acquire a 25,1% stake in the company.
The agreement, valued at about R203-million, represents the first major black empowerment deal in the history of the South African liquor industry. KWV Limited is the unlisted public holding company that holds both the operations of wine producer KWV and a 55% stake in JSE-listed KWV Investments.
Its shares trade over the counter and its share price, last at R1,65 early on Wednesday, is quoted by such financial services groups as PSG and Barnard Jacobs Mellet.
As KWV Investments sole asset consists of a 30% stake in Distell, South Africa’s largest listed wine and spirits producer, the BEE consortium would also end up with an indirect 4% shareholding in Distell should the deal be concluded successfully.
Unveiling the terms of the deal on Wednesday, KWV chairperson Danie de Wet said the offer represents a “fair” discount of 27% to the group’s net asset value of R2,58 per share on December 31 2003. The offer to be made by Phetogo has the full support of the KWV board.
He said he has also received a letter of support for the agreement from South African Minister of Agriculture Thoko Didiza. — I-Net Bridge