Downgrades clip Pioneer’s wings
The food and beverage manufacturer’s expansion into Africa and other territories would have allowed for growth, says analyst
Pioneer’s expansion plans have been thwarted by the downgrades by ratings agencies of SA’s sovereign debt. The food and beverage manufacturer withdrew its cautionary announcement on Friday, saying that due to the downgrades and the potential for further ratings action, it would no longer proceed with the material transaction it had been considering. "The parties have decided to discontinue negotiations at this time. Accordingly, caution is no longer required to be exercised by shareholders when dealing in the company’s securities," it said. Zeder also withdrew cautionary announcements it had issued in tandem with Pioneer’s. Zeder has a 27.1% stake in the consumer brands giant. According to Zeder, the Pioneer stake, which is worth R10.3bn, represents about 66% of Zeder’s R15.4bn sum-of-the-parts valuation. Vunani food producers and agriculture analyst Anthony Clark said the end of the negotiations would have come as a blow to Pioneer, which had little scope to expand in the local mar...