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Tiger may face long AVI battle
Food manufacturer Tiger Brands could be in for a long battle to buy rival AVI, which rejected its R8 billion bid yesterday, saying it did not make commercial sense and was not in the best interests of the company and its shareholders.
According to AVI, the offer was the third attempt by Tiger Brands, SA's largest food manufacturer, to buy the company.
Tiger Brands CEO Peter Matlare was unfazed yesterday, and defended the bid saying his group would keep talking to AVI shareholders, telling them the takeover was in their best interests.
AVI, which has a spread of divisions from food and beverages to clothing, said the terms of the offer as announced by Tiger Brands were materially the same as those of the second bid of 24 October, and failed to address concerns its board raised then. Tiger's first bid was made on 8 October.
AVI was unwilling to let a competitor such as Tiger Brands have access to confidential information.
AVI is SA's second-biggest food manufacturer. Tiger Brands' market capitalisation is R23,5bn, and AVI's R6,9bn.
Tiger Brands said its cash and share offer was worth R24 per AVI share, 62% more than AVI's closing price of R14,80 on Friday. It had acquired 15,85 million AVI shares on the market, 4.6 % of AVI's issued share capital.
Tiger Brands said its acquisition of AVI would let its shareholders realise a “substantial” portion of their holding in cash and provide an opportunity to participate in the benefits of the combined entity.
Source: Business Day
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