Sovereign endures toughest year as more takeover battle costs loom
Chicken producer reports annual loss and is likely to rack up legal costs again to defend against renewed takeover bid by CBH
Sovereign Foods may incur more costs in fending off a takeover bid by rival and shareholder Country Bird Holdings (CBH), as a second bid for the company will come due in September, according to takeover regulations. On Tuesday, at Sovereign’s presentation of its results for the year to February 2017, the group said R30.7m, or 41.2c per share, was incurred during the year in "corporate activity costs". These included the black economic empowerment transaction and staving off the CBH bid. Sovereign’s headline earnings per share plunged to a loss of 46.5c from 108.4c in 2016. Despite revenue rising 25% to R2.2bn, the company reported a total loss for the year of R35.5m from a profit of R81m in 2016, as operating profit fell 89% to R18.5m. Sovereign CEO Chris Coombes said on Tuesday that the money spent on corporate activity was "indirectly and directly" linked to fending off the CBH transaction. But he remained tightlipped on the actual amount spent on fighting the takeover bid. "We pr...
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