Standard Bank, Led By Sim Tshabalala, Commits Nearly 1 Billion To Barloworld Acquisition
- Standard Bank is committing R17 billion 913.2 million to support the R22.8 billion 1.23 billion takeover of South African industrial giant Barloworld.
- The 1.23 billion deal values Barloworld at 6.607 per share, an 87 premium on its 30-day VWAP before the first transaction-related cautionary announcement.
- If approved, the buyout will make Barloworld a majority black-owned private firm, maintaining its South African base and operational continuity with Caterpillars backing.
Standard Bank Group, a Johannesburg-based financial services giant led by Sim Tshabalala, is committing up to R17 billion 913.2 million to support a major takeover of South African industrial giant Barloworld. The banks backing is a key part of the broader R22.8 billion 1.23 billion bid, reinforcing its role as a dominant corporate financier on the continent.
A shift toward majority Black ownershipThe R23.3 billion 1.25 billion offer comes from a consortium led by Saudi Arabias Zahid Group and Entsha Ltd., a firm co-owned by Barloworld CEO Dominic Sewela. Their bid represents an 87 percent premium over Barloworlds 30-day VWAP as of April 12, 2024a significant mark-up that signals strong confidence in the companys future.
With backing from Barloworlds board, the acquiring entity, Newco, has offered R120.00 6.44 per share in cash, maintaining the valuation despite Barloworlds R3.10 0.166 dividend declared on Nov. 22, 2024. If successful, the deal will turn Barloworld into a majority black-owned company, advancing South Africas Black Economic Empowerment BEE goals while preserving its core business.
Governance and regulatory oversightIn terms of governance, Barloworld has taken all necessary steps to ensure the integrity of the process. The companys Independent Board, advised by Rothschild Co, has deemed the offer fair and reasonable, ensuring regulatory compliance and avoiding conflicts of interest, particularly with CEO Dominic Sewelas involvement.
Zahid Groups 49 percent stake in Newco strengthens the deal with its extensive experience in the industrial sector, particularly in Caterpillar dealerships. Having been a Caterpillar dealer since 1950, Zahids industry expertise is expected to support Barloworlds long-term growth and regional expansion.