Clover receives R4.8 billion buyout offer from consortium of companies

The Clover shares rose as much as 21 percent to a record R24.22.

Consumer goods firm Clover Industries received a R4.8 billion buyout offer from a consortium of companies, including Brimstone Investment Corporation and the executive management of Clover, the company announced on Monday.

Clover announced on Monday that its shareholders have been offered R25 per share from a consortium called Milco, which plans to delist the company from the JSE.

The R25 per share offer represents a 25 percent premium to Clover’s closing price of R20 on Friday.  The Clover shares rose as much as 21 percent to a record R24.22 on Monday morning.

The Milco consortium is led by Israel-based Central Bottling Company (CBC), which is offering to buy 59.5 percent of the SA food producer. The remainder of the shareholding would be held by Brimstone Investment Corporation (15 percent) and executive management of Clover (6.3 percent).

Brimstone Investment Corporation is a black-controlled and managed investment company incorporated and domiciled in South Africa.

Clover is a branded consumer goods and products company operating in South Africa and select African countries reaching a wide range of consumers with a range of value-added dairy and non-dairy products. Clover has restructured its business over the past four years to diversify from its core dairy business to focus on value-added products and non-dairy food products.

In addition to producing milk, yoghurt and cheese, Clover moved to introduce olive oil, sugar free and lactose-free beverages to line of products.

In justifying the deal, Milco said it believes that Clover presents an attractive investment given its expansive chilled distribution capability, strong market position for key brands and an experienced management team.

“Milco, which brings extensive knowledge of the dairy, juice and non-alcoholic beverage industries, has the technical and research ability to bring healthier food to consumers, access to international brands, and connections and operating experience in sub-Saharan businesses, in addition to its proven commercial and trade abilities,” it said in a statement. 

Milco intends to combine its capabilities with those of Clover to “unlock value through key strategic initiatives, primarily aimed at accelerating sales, distribution and efficiency opportunities within Clover’s product portfolio in South Africa, with expansion into select sub-Saharan Africa territories.”

Clover has established an independent board of directors to evaluate the buyout offer. The independent board comprises Dr. Steve Booysen (as lead independent director), Dr. Whitey Basson, Neo Mokhesi, Flemming Morgan and Babalwa Ngonyama.