Afgri will `plough on in West Cape`
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Trade and Industry Correspondent
AGRICULTURAL services group Afgri`s failed bid to take over Boland Agri will not deter the group`s efforts to enter Western Cape`s agricultural market, said the company`s corporate adviser, Cobus Human.
On Friday, Boland Agri shareholders overwhelmingly voted in favour of a merger with Western Cape`s biggest agricultural co-operative, WPK.
The vote in favour of the merger has effectively cancelled Afgri`s R178,5m offer for Boland Agri. Agfri offered R2,50 a share.
In an attempt to win over Boland Agri`s shareholders, Afgri also offered the shareholders an option to receive partial payment by means of a dividend of Boland shares in diversified group Pioneer Foods.
Pioneer Foods shares contribute more than 75% of Boland Agri`s net asset value and more than 40% of the company`s after-tax profits.
However, the bid fell through when 86% of Boland Agri`s 2 200 shareholders went with the advice of the goup`s board and voted in favour of the WPK merger.
In their rejection of the offer, the Boland Agri board argued that it was not financially attractive and would lead to farmers losing control of the company.
Human said that, despite the setback, Afgri would still look for ways to have a presence in Western Cape.
Afgri MD Jeff Wright said that the group`s offer to Boland Agri was the first step towards implementing the company`s strategy of establishing itself in Western Cape, `a province which Afgri believes holds significant potential for the group`.
`We demonstrated to Boland Agri farmers, as well as other farmers in the region, that Afgri is serious about establishing a presence in this market,` Wright said.
He was still confident about Afgri`s expansion strategy.
`Afgri`s offer to acquire Boland Agri has brought us much closer to farmers in the region and provided Afgri with critical feedback about the region, which will benefit us in implementing our alternative strategy,` he said.
The merger between Boland Agri and WPK is still subject to Competition Commission approval. If the merger gets the nod , Boland Agri and WPK will form a new company called Cape Agri.
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