Latest news with #Newco
IOL News
2 days ago
- Business
- IOL News
Tribunal approves R23bn Barloworld acquisition by Newco, sets empowerment conditions
Former executives in Barloworld are acquiring the group through Entsha Proprietary Limited, while Saudi Zahid Group is the other shareholder in Newco. Image: Supplied Tawanda Karombo The Competition Tribunal has granted approval for the acquisition of industrial giant Barloworld by Newco, contingent upon fulfilling specific public interest and empowerment criteria aimed at benefiting historically-disadvantaged persons (HDPs) in South Africa. This heralds a significant shift not only for Barloworld but for its employees, as the merger promises structural changes rooted in empowerment and employee participation. Former executives in Barloworld are acquiring the group through Entsha Proprietary Limited, while Saudi Zahid Group is the other shareholder in Newco. With Newco intending to bump up its shareholding in the South African company, Barloworld will ultimately be delisted from the JSE. The merging parties, through their legal representative, told the Competition Tribunal hearing last week that the delisting of Barloworld was a major condition for the implementation of an employee share ownership program (ESOP). After delisting, a women-led consortium will also be empowered into the company. The Competition Tribunal on Friday announced that it has approved the proposed merger, stressing that conditions related to employment, empowerment and ESOP be met. 'For a period of two years after the merger's implementation, the merged entity may not retrench any of its employees in South Africa as a result of the merger. In addition, Barloworld employees' existing terms and conditions of employment will not be changed as a result of the merger,' said the Tribunal on Friday. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ The merged entity also has to implement two phases of empowerment of historically disadvantaged persons that will give the groups, together with participating employees, a collective 13.5% shareholding in Barloworld. The second phase of the empowerment program involves the acquisition of a further collective 10% of Barloworld's issued shares by HDPs and participating employees. This will be on the basis of a 5% stake for employees through an ESOP and a 5% stake for a women-led consortium, to be selected and approved by the merged entity. 'Participating employees' are described as permanent employees of Barloworld or its subsidiaries and associate companies, the majority of whom are HDPs, who have been employed for at least six months. The second phase of the empowerment statutes has to be implemented within 24 months of Barloworld's delisting from the JSE and A2X securities exchanges, following the merger's implementation,' said the Competition Tribunal. 'Before implementing Phase 2, the merged entity must provide the Competition Commission with details of the proposed Phase 2 transactions in writing, at least 100 days before the 24-month period expires. These details must include the identity of the women-led HDP consortium/shareholders, including evidence that the prospective HDP shareholders are appropriately classified as HDPs.' Newco is offering R123.10 per share for Barloworld. The Tribunal also heard last week that Newco now had assurances of about 58% shareholders to raise its stake in the company and delist it. For the year ended September 2024, Barloworld revenue dropped 7% to R42 billion, with operating profit from core activities falling 12.6% to R3.8bn and Ebitda declining 7% to R5bn. Gross debt, however, eased 29% to R7.9bn.
IOL News
6 days ago
- Business
- IOL News
Barloworld's future at stake as Competition Tribunal hears acquisition details
Former executives in Barloworld are acquiring Barloworld through Entsha Proprietary Limited while Saudi Zahid Group is the other shareholder in Newco. Image: Supplied The Competition Tribunal hearing concerning the acquisition of the longstanding South African company Barloworld by Newco has ignited discussions around empowerment for historically disadvantaged persons as well as the company's impending delisting from the Johannesburg Stock Exchange (JSE). As the details unfolded on Wednesday, tensions rose over the implications of this significant transaction. Former executives in Barloworld are acquiring Barloworld through Entsha Proprietary Limited while Saudi Zahid Group is the other shareholder in Newco. With Newco intending to bump up its shareholding in the South African company, Barloworld will ultimately be delisted from the JSE. The merging parties through their legal representative told the Competition Tribunal hearing on Wednesday that the delisting of Barloworld was a major condition for the implementation of an Employee Share-Ownership Program (ESOP). After delisting, a women led consortium will also be empowered into the company. 'The merger parties' position is quite clear that if there is no delisting, they're not in a position to implement an ESOP. That being said, we are confident and the likelihood is that there will be a delisting,' the merging parties told the Competition Tribunal hearing. Newco is offering R123.10 per share for Barloworld. The tribunal also heard on Wednesday that Newco now has assurances of about 58% shareholders to raise its stake in the company and delist it. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Ad loading Barloworld's financial performance adds context to what is at stake. For the year ended September 2024, revenue declined by 7% to R42 billion, with operating profit from core activities falling 12.6% to R3.8bn and Ebitda declining 7% to R5bn. Gross debt, however, eased 29% to R7.9bn. The delisting of Barloworld is important for Newco as without it, it will be 'practically difficult for it to implement' transactions overpowering historically disadvantaged persons. To attain this, Newco is pursuing to bump up its stake to 90%. 'So that is why the HDP transactions are conditional on Newco effectively acquiring all of the Barloworld shares and Barloworld being delisted,' said the merging parties legal representative at the hearing. Wiri Gumbie, principal analyst for mergers and acquisitions at the Competition Commission, told the hearing that he was 'hopeful' that Newco will attain the 90% threshold to unlock total control of Barloworld and delist it. However, some concerns emerged that the delisting of Barloworld may not be easy to attain given that some minority shareholders could be disinterested in giving up their interests in the company. 'It's sounding more and more that the chances of the delisting may certainly not happen. The chances of workers benefiting and the women led consortium benefiting is certainly hanging in the balance in this regard and unfortunately, it is a concern now regardless,' the Competition Tribunal heard. Gumbi also revealed that the Public Investment Corporation (PIC) had indicated that it required the securing of black economic empowerment shareholder participation for it to support the transaction. The merging parties had addressed and resolved this, and the PIC is now satisfied that this has been settled under the conditions set out. Newco had included the empowerment provisions for historically disadvantaged persons and the ESOP after discussions with the PIC. Remaining shareholders that elect not to sell their shares then the requirement to do an ESOP will risk further dilution of their minority stakes. 'If there are minority shareholders that remain on the list and there needs to be, for example, an issuance of new shares or some other major transaction to implement those, there would presumably be some kind of shareholder approvals and and basically shareholder votes required and on such matters,' said the merging parties legal counsel. 'It may well be that if the transaction is implemented by way of an issuance of new shares, they may be affected because they would be effectively a dilution of their shares.' BUSINESS REPORT
IOL News
09-06-2025
- Business
- IOL News
Competition Commission recommends approval of Barloworld's R23bn acquisition
Barloworld is a step closer to being purchased by a consortium made up of Entsha, which was created for the deal by the Katlego Le Masego Trust, and Saudi Arabia's Zahid Group. Image: Supplied The Competition Commission has recommended that the Competition Tribunal approve the proposed R23 billion acquisition of Barloworld, subject to certain public interest conditions. This comes after the Public Investment Corporation (PIC), Barloworld's biggest shareholder with 21.93%, in April accepted the Standby Offer for the acquisition of all of Barloworld's ordinary shares for a cash consideration of R120 per share, with additional conditions, by the recently formed special purpose consortium, Newco. Newco on Monday said the recommended conditions principally relate to its commitment as stated in the PIC undertaking announcement to implement a 13.5% broad-based black economic empowerment transaction in Barloworld after the delisting of Barloworld from the JSE and A2X. Newco comprises Entsha Proprietary and Gulf Falcon Holding, a wholly-owned subsidiary of Zahid Group. The Commission's recommendation will now be considered by the Tribunal for approval. In addition to approval by the Tribunal, the Newco said the parties were continuing to work towards the fulfilment of the remaining conditions required for the transaction to become unconditional, including competition approvals from other jurisdictions. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Shareholders will be advised in due course as to material developments in this regard. Sydney Mhlarhi, spokesperson for Newco, said the Competition Commission's positive recommendation was another vote of confidence in the transaction and allayed concerns around a lengthy time frame to conclude the deal. 'We strongly believe that the transaction is positive for South Africa and will secure Barloworld's long-term future. It unlocks a material and highly attractive premium for shareholders and will create broad based economic and value benefits through the BEE transaction. We look forward to concluding the transaction in the near future,' Mhlarhi said. Last month, the international heavy industrial equipment and food and ingredient solutions group agreed to extend the Standby Offer to 30 June 2025. The Standby Offer is currently open and Barloworld shareholders who wish to accept the offer are encouraged to instruct their Central Securities Depository Participants (CSDPs) or broker to accept the offer on their behalf ahead of the acceptance deadline of 16h30 on 30 June 2025, after which, Newco will assess the level of acceptances received by this date and decide whether or not it wishes to waive the acceptance condition in whole or in part. 'We are confident, based on recent and ongoing discussions with shareholders, in relation to the Standby Offer, that we will receive sufficient levels of acceptance to proceed with the transaction,' Mhlarhi said last month. Following the opening of the Standby Offer, Barloworld has received several inbound queries from ordinary shareholders who have indicated to their CSDPs or brokers that they wish to accept the Standby Offer but have been advised that they will only be able to do so at a later stage. Barloworld said there was no lawful basis for a CSDP or broker to delay in accepting the Standby Offer on behalf of the shareholder in question, adding that CSDPs and brokers must review their processes to ensure that instructions in relation to the Standby Offer were processed without delay and appropriate confirmation was sent to the relevant shareholder once their instructions have been processed. 'The Standby Offer remains open and the timing for the implementation of the transaction will depend on acceptance levels of the Standby Offer and receipt of the required regulatory approvals,' it said. 'Barloworld Ordinary Shareholders should note that if Newco does not receive sufficient acceptances of the Standby Offer by 30 June 2025 to satisfy the Acceptance Condition, Newco may not waive the Acceptance Condition, in which event the Standby Offer will fail. Accordingly, Barloworld Ordinary Shareholders who have decided to accept the Standby Offer but have not yet done so should note that failing to accept the Standby Offer by 30 June 2025 may result in the Standby Offer failing.' BUSINESS REPORT
Zawya
27-02-2025
- Business
- Zawya
South Africa's Barloworld shareholders reject Saudi firm Zahid's $1.25bn bid
Saudi Arabian company Zahid Group's bid to take over South African industrial giant Barloworld has hit a snag. Shareholders of Barloworld voted against the buyout plan of Newco, a consortium of investors that include Entsha and Zahid Group, on Wednesday. Last December, Barloworld confirmed Newco's intention to buy the company's entire issued share capital for ZAR 120 ($6.5) per share, valuing it at approximately $1.25 billion. The deal did not get the requisite majority of votes from shareholders, thus a standby offer has been triggered, the Johannesburg Stock Exchange-listed company said. Zahid Group is a distributor of heavy equipment machinery in the region. (Writing by Cleofe Maceda; editing by Seban Scaria)
