Johannesburg - The management of South Africa's Afgri and an investment firm have together offered around $258 million in cash to buy out the agriculture services company.
Afgri, which produces animal feed products and provides financial services to farmers, said investment firm AgriGroupe had offered to pay 7 rand a share to take it private.
That values the company at 2.6 billion rand ($258.00 million) and represents a 46 percent premium over the share's 30-day average price before it first said it was in talks about a possible deal.
Certain members of Afgri's management would hold a 5 percent stake in AgriGroupe following the deal, the two companies said in a joint statement.
AgriGroupe is owned by Joseph Investment Holdings, a private company incorporated in Mauritius.
“AgriGroupe supports Afgri's strategic vision for pan-African growth and will maintain management continuity ... to safeguard Afgri's assets and business model over the long term,” the companies said.
AgriGroupe has received irrevocable undertakings from shareholders holding 42.6 percent of the company to vote in favour of the deal, the companies said.
Shares of Afgri closed up 4.7 percent at 5.81 rand before the announcement.
Investec is advising Afgri on the deal, while AgriGroupe is being advised by FirstRand unit Rand Merchant Bank. - Reuters