Legal fees hit Sovereign earnings
Fight to stave off Country Bird hostile bid results in headline loss
Country Bird Holdings (CBH) chairman Kevin James says the hefty legal and advisory fees notched up by Sovereign Foods are jeopardising the company’s future. James was speaking after Sovereign released a trading update, advising shareholders of an expected headline loss of between 42c and 54c a share for the year to February 2017, compared with headline earnings a share of 108.4c in the previous year. Sovereign’s announcement revealed that the expected 2017 loss includes R31.4m, equivalent to 41.2c a share, of legal and advisory fees relating to the board’s efforts to defend itself from a hostile bid by CBH. Sovereign is in a closed period. Despite the trading statement, Sovereign’s share price remained unchanged at 900c on Tuesday. Analysts said the share price was underpinned by expectations that CBH would increase its offer in a bid to secure control of the company. Vunani Securities analyst Anthony Clark said it was reasonable to expect a board and management team to fight to sta...
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