Barloworld buyout on track as consortium waives 90% acceptance condition

The transaction between Barloworld and a management-led consortium remains on course, with both parties confirming that the consortium will waive the 90% minimum acceptance condition for its standby offer, according to a statement from the consortium and Barloworld earlier this week.

Once all other conditions of the offer are fulfilled or waived, the buyout, led by CEO Dominic Siwela and Saudi Arabia’s Zahid Group, will proceed without requiring the previously stipulated 90% shareholder acceptance threshold.

Current acceptances, together with the shareholdings of the Public Investment Corporation (PIC) — Barloworld’s largest shareholder, with 22% ownership — the consortium, and the Barloworld Foundation, represent 57.7% of the company’s ordinary shares in issue. The combined shareholding ensures that the consortium will obtain a controlling interest in Barloworld once all other conditions are fulfilled or waived. 

The acceptance deadline has been extended to the date on which the last of the remaining conditions precedent to the standby offer are fulfilled. This extension ensures that the consortium will hold at least 51% of Barloworld ordinary shares in issue after the standby offer is implemented. However, if the conditions are not fulfilled or waived by the acceptance date deadline, the consortium will be required to pay a break fee of R20m to Barloworld.

The consortium launched its offer in late 2024 to acquire all Barloworld’s ordinary shares at a cash price of R120 per share, valuing the company at about R23.3bn. 

A key development in the transaction has been the involvement of the PIC, SA’s largest asset manager. The PIC initially rejected the offer over concerns about corporate governance, but later agreed to accept the standby offer after extensive engagement and assurances, including commitments to implement a 13.5% broad-based BEE (B-BBEE) transaction following Barloworld’s planned delisting from the JSE and A2X.

The deal has garnered support from key stakeholders, including Caterpillar, Barloworld’s primary supplier and a key revenue driver, which has publicly endorsed the standby offer and the prospect of local ownership.

The Competition Commission has recommended approval of the transaction to the Competition Tribunal, subject to public interest conditions, including the B-BBEE commitments.  

tsobol@businesslive.co.za