South Africa’s Pioneer Food Group said on Monday it has submitted a firm intention to offer $120-million for wine and spirits maker KWV, after two other firms expressed interest to offer counter-bids.
Pioneer Foods said it plans to buy KWV for R828-million in cash and shares to diversify its revenue, but may face competition from South African dairy foods maker Clover and United Kingdom-based spirits maker Halewood International.
Pioneer Foods, which makes bread, breakfast cereal and juice, said with the acquisition would help it expand into the wine and brandy markets.
“Pioneer Foods shareholders will benefit from the addition of a sizeable business, which generates revenue in excess of R700-million per annum,” the company said in a statement.
The company may face rival bids from two other firms.
Clover, due to list on the JSE on Tuesday, is interested in bidding for KWV, Clover’s chief executive told Business Day.
“I thought about it. I have followed it with interest. I wonder why they would choose Pioneer to unlock value and not Clover,” chief executive Johann Vorster was quoted as saying by the newspaper on Monday.
A Clover spokesperson later told Reuters: “Management has not discussed [this] with the board so any speculation for an offer is premature”.
Pioneer’s offer for KWV also faces competition from UK wine and spirits firm Halewood International, the paper said.
No one was immediately available for comment at Halewood’s South Africa offices. — Reuters