Barloworld’s R23 billion Saudi takeover hits a roadblock

Barloworld’s shareholders rejected a takeover plan by Saudi Arabia’s Zahid Group. 

Zahid Group offered to buy all the shares of the South African company at R120 apiece, valuing it at around R23 billion. 

The deal failed to get the majority needed to pass, triggering a standby offer, the distributor of Caterpillar Inc’s equipment in Africa said in a statement. 

Details of the standby offer will be announced in the coming days, Barloworld said.

The company’s shares dropped 2.5% as of 5:03 p.m. in Johannesburg. 

London-based investor Silchester International Investors, which holds close to 18% of the company — said previously it would reject any price below R130 a share.  

Zahid’s Gulf Falcon and Entsha, an entity linked to Barloworld CEO Dominic Sewela, announced the offer in December. At the time, the bid was a 30% premium on the day’s closing price.

The Saudi group started accumulating shares five years ago and holds a 19% stake.