Johannesburg - Sovereign Foods yesterday informed its shareholders that rival company Country Bird would now hold a beneficial interest in 17.7 percent of the total issued ordinary shares in the company.
A beneficial interest is the right to receive benefits on assets held by another party.
Country Bird, which currently holds a 9.5 percent stake, is continuing with its quest to gain a controlling stake in the JSE-listed Sovereign Foods.
Last week Country Bird announced that it had tabled a R9 a share offer to take over the controlling stake in the company, with the Sovereign Foods share price gaining more than 16 percent to trade at R8.38 a share after the news.
However, shareholders said the offer excluded a dividend or interest payments – critical in what could be a drawn out battle for control. The offer by Country Bird values Sovereign Foods at about R685 million.
Yesterday the share price reached a peak of R8.75 a share before closing the day 0.8 percent down at R8.68 a share.
The success of Country Bird’s buyout offer will depend on the response by institutional shareholders, in particular Prudential, Old Mutual and Sanlam, and investment company RECM & Calibre. The shareholders represent about 55 percent of Sovereign.
Country Bird wants to block a proposed scheme that threatens to put control of Sovereign Foods out of its reach.
The meeting, scheduled for July 25, will vote whether to implement a proposal that would introduce black economic empowerment shareholders to Sovereign.
BUSINESS REPORT