WATCH: Iconic brand Clover to delist after merger with Milco approved
Companies / 30 September 2019, 12:30pm / Sandile Mchunu
DURBAN - Clover Industries’ share price surged by more than 3.72percent on Friday after the country's largest dairy producer submitted an application to delist its shares, and ending its nine-year presence on the bourse.
Clover, one of South Africa’s iconic brands, submitted an application to delist after the country’s Competition Tribunal approved its merger with Israel company, Milco SA.
Clover said it would officially cease trading on Wednesday, when its shares are suspended from the JSE.
It would also delist from the Namibian Stock Exchange (NSX).
Clover said the termination of listing of its shares on the JSE and the NSX would be on October 15.
Clover’s share price jumped to R24.84 a share on the JSE on Friday, taking its market capitalisation to R4.78billion. Its shares ended the day at R24.80, 3.55percent up.
The stock has been bullish since the Milco consortium showed interest in acquiring Clover earlier this year, when the fully funded cash offer represented a 77percent premium to its closing price of R14.10 on October 18, 2018 the day prior to Clover issuing its original cautionary announcement.
The tribunal gave the merger the green light last week, ending months of waiting between the shareholders of the South African brand and the Tel Aviv-based Milco SA.
However, the authorities subjected the R4.8bn transaction to stringent conditions, including the protection of jobs, local procurement, and information-sharing conditions.
The deal has met the regulatory approvals, and shareholders voted in its favour in March.
“Further to the SENS announcements released on July 19, and September 10, 17, 20 and 26, Clover and Milco SA are pleased to confirm that all conditions precedent to the scheme have now been fulfilled,” Clover said.
But the tribunal had some concerns before approving the deal.
It initially had concerns with the merging parties’ tendered employment-related conditions in terms of which 516 workers would be retrenched as a result of the completion of Project Sencillo, a Clover project to ensure better use of its assets.
The completion of Project Sencillo is expected to take up to five years.
The tribunal consulted the General Industries Workers Union of South Africa, the Food and Allied Workers Union and the Inqubelaphambili Trade Union - the unions that had raised concerns about potential job losses, as a result of Project Sencillo.
After consultation with the unions, the tribunal said the job losses would be reduced to 277 instead of the initial 516 jobs.
The expected job losses would be offset by Project Masakhane, which would create 550 new permanent jobs over five years.