Barloworld advised to accept Saudi’s Zahid’s USD 1.2 bn takeover bid: Proxy advisory firms GlassLewis and Institutional Shareholder Service are reportedly advising shareholders of South African Barloworld — a provider of construction and mining equipment and services — to accept Zahid Group ’s ZAR 22.8 bn (USD 1.2 bn) takeover offer, stating that ZAR 120 apiece is a fair value, Bloomberg reports. Independent valuations from Rothschild also support the offer, estimating the stock’s worth between ZAR 105.53-119.43 apiece, despite some shareholders’ earlier refusal to sell for less than ZAR 130 per share.

REFRESHER- Jeddah-based heavy equipment distributor Zahid Group and Entsha placed abid to fully acquire Barloworld in December 2024. The bid valued the stock at a premium of 30% to its last closing price before the news surfaced. The pair also offered to pay up a ZAR 3.10 dividend that Barloworld had announced previously, in order to sweeten the arrangement.

It all hinges on a vote: A final shareholder vote on Wednesday, 26 February will decide if the transaction secures the 75% approval threshold needed to go through. No higher offer is expected, making this a take-it-or-leave-it scenario for investors, the business news information service reports citing sources it says are in the know.

This is a related party transaction. Zahid has been steadily upping its shares in Barloworld over the last four years and currently holds 19% of the company. The Saudi firm’s investment in the South African firm looks to reap gains from an uptick in construction activity in the African market, with the market set to grow 27% by 2029 on the back of government outlays for infrastructure and strong consumer demand.

Tags: