Zeder, Pioneer's largest shareholder, is up 23.17%
Zeder’s share price rose more than 28percent on Friday morning following the announcement by PepsiCo that it intends to acquire 100percent of the shares in Pioneer Foods through an all-cash offer of R110 per share, plus the R2.19 dividends that are due at the end of the year. Zeder closed 23.17percent up at R4.89.
Zeder has a 28.23percent stake in Pioneer Foods. The intention is to delist Pioneer Foods from the JSE, and for it to become part of PepsiCo’s global business.
The cash transaction will be one of PepsiCo’s largest acquisitions outside the US and will see an inflow of much-needed direct foreign investment of about $1.7billion (R23.63bn) into South Africa.
Celliers said the offer was still subject to Pioneer Foods and Zeder shareholders approving the transaction, but said that engagement in this regard had been very positive.
“We have already received irrevocable undertakings of support from the majority of Zeder shareholders and are confident that the offer will receive the requisite support. The proposal was considered carefully and we believe it is a good transaction for all stakeholders. It should enable Pioneer Foods, as an organisation, to evolve positively into its next chapter of growth,” he said.
For Zeder the proposal, if fully implemented, represents some R6.4bn in cash.
The company plans to use this to settle or reduce debt, and potentially declare a special dividend, thereby returning a portion of the net proceeds to shareholders.
It was anticipated that the cash proceeds would flow towards the middle of February 2020.
“It is always difficult to decide to sell a strategic investment. It is also not easy to determine the perfect price, but we believe that the offer represents a good premium to shareholders and is in the interest of all stakeholders.”
Zeder has been the largest shareholder in Pioneer Foods for almost 13 years and Zeder had overseen its strategic expansion and growth, Celliers said.