Mustaq Brey. Picture: FINANCIAL MAIL
Mustaq Brey. Picture: FINANCIAL MAIL

The rest of the consortium seeking to take over Clover, the country’s biggest dairy producer, reiterated its commitment to the proposed transaction, easing concern that it may be scuppered by its empowerment partner, which said it was reconsidering its participation over the involvement of an Israeli company.

Brimstone, which was due to have a 15% stake in the MilCo consortium, dropped a bombshell on Thursday, saying it had noted "widespread outrage" over its proposed participation in the R4.8bn deal.

On Monday, the JSE-listed company’s CEO, Mustaq Brey, was still hailing the transaction, saying that it would bring foreign
direct investment that SA needed "if we wish to achieve the economic freedom our country deserves".

Its new stance, which came after threats from lobby group Boycott, Divestment and Sanctions SA (BDS) over the participation of Israel-based Central Bottling Company, led to Clover’s share price dropping by the most since October.

The Israeli company has a 59.5% stake in the consortium.

Other members are Ploughshare Investments, which will acquire 10.9%, and IncuBev with 8.3%. Management is due to retain a 6.3% stake.

In a statement on Thursday, the other members of the consortium reiterated their commitment to the deal. MilCo said it had noted Brimstone’s announcement, adding that MilCo represents a strong group of operators and investors with expertise in the dairy, juice and beverage industries.

"We are excited about the opportunities that the SA economy offers and the plans we have identified to grow the loved Clover brands and the sector as a whole," MilCo said.

Brimstone’s change of tune came after pressure from
BDS, which has accused Central Bottling Company of being complicit in human rights abuses. Brimstone and Clover management are the SA representatives in the consortium.

BDS on Thursday threatened to instigate a boycott of Clover. The organisation said there would be "direct action and a militant, but peaceful campaign", should the transaction proceed.

BDS said in a statement on Wednesday this could mean disruptions at Clover’s operations.

BDS, which has previously targeted Woolworths, said that
it welcomed Brimstone’s decision to review its role in
the consortium.

"BDS SA believes that SA companies are attractive investment opportunities for global investors and that there will be many alternative investors who are not tainted by the violation of international law and human rights," BDS said.

The consortium, which has plans to delist Clover, has offered shareholders of the food and beverages group R25 per share — a 25% premium to Friday’s R20 closing price.

The food group’s share price jumped as much as 19% to R23.80 on Monday. On Thursday it was down 4.1% at R22.05, the biggest drop since October 29.