DISTELL shareholders voted with a clear majority of more than 94 percent in favour of the €2.2billion (R37.7bn) takeover by international brewing giant Heineken International, in what is likely to be the biggest foreign investment in South Africa this year.
There had been grumbling among some shareholders about the low price of R180 per Distell share. For example, the large asset management firm Ninety One came out only a day before yesterday’s extraordinary general meeting to say they believed the bid to be unfair and too low. In the event, Distell shareholders holding more than 18 million shares voted against the deal.
Remgro, which owns around 30 percent of Distell, voted in favour of the deal. A Distell spokesperson said a clear majority voted in favour of the deal even without the Remgro stake.
The Public Investment Corporation (PIC), which manages the state pension fund investments, holds 29.92 percent of Distell, and so also likely voted in favour of the deal yesterday.
Opportune Investments’ chief investment officer Chris Logan said he too believed the offer could have been higher, as Distell’s management had only recently aligned with the operations through share incentives, and the group had begun to perform well. It was also sad that South Africa did not have its own large liquor industry group, he said.
Logan said though the country was generally hostile to the liquor industry, as evidenced by high customs and excise duties and through the lockdowns, the local market was stagnant, and consolidation was the nature of the global liquor industry.
Heineken announced its offer to buy the South African company for R38.5bn in November last year, and the offer splits Distell into two business, with its wine and spirits brands to be combined into a new company (Newco), with Heineken Southern Africa’s business and the Dutch interest in Namibia Breweries.
Distell shareholders were getting R165 cash per share for their stake in Newco − or could opt for unlisted shares in Newco or a combination.
Capevin will house Distell’s remaining brands.
This will include its Scotch whisky unit and Gordons gin business which will be unbundled, with Distell shareholders offered R15 per Capevin share.
Distell is the second-largest cider producer in the world after AnheuserBusch InBev, which owns the Strongbow brand.
Distell owns brands such as Savanna, Hunters Dry, wines such as Nederburg, and other liquor brands such as JC le Roux, the brandy Klipdrift and Amarula, a cream liqueur.
Together, Heineken’s offer to Distell shareholders comes to R180 per share, valuing Distell’s business at R40.1bn.
Yesterday afternoon, the share price was up 0.55 percent to R171.88, putting the market value at R38bn − the share price has increased 52.2 percent over a 12-month period.
The share price closed unchanged at R170.45 on the JSE yesterday evening.
BUSINESS REPORT ONLINE