The Public Investment Corporation (PIC), a 21.97% shareholder in Barloworld Limited (Barloworld), has voted against the proposed takeover of the company, at R123.10 per share, and has expressed its concerns with corporate governance processes at the company.
It has also exercised its right to vote against board members who were up for re-election at the company’s annual general meeting last Friday.
According to the Daily Investor, Barloworld was set to be bought by a consortium of investors, dubbed ‘Newco’, which comprises Entsha (51%), a company heavily linked to CEO Dominic Sewela, and long-term shareholder Zahid Group (49%).
According to a statement released on Friday, the PIC’s mandate is to generate value and financial returns for its clients while ensuring positive socioeconomic outcomes.
While it does not comment on specific transactions in the ordinary course of business, given “considerable media attention on the proposed transaction and the gravity of the issues,” it chose to issue the public statement.
It says it understands the strategic direction that original equipment manufacturer Caterpillar has taken to privatise the running of its dealerships.
However, the statement reads that it is concerned with Barloworld's corporate governance standards and the steps its board followed in considering the transaction in question.
“These concerns have been expressed to the board over a series of robust engagements. The PIC will continue to engage the board accordingly.”
The firm says it supports the empowerment of previously disadvantaged groups in South Africa and prefers inclusive, broad-based transactions.
“The benefit of empowerment or any transactions should cover a wide range of stakeholders,” it adds.
“The boards of its investee companies are expected to act in the best interests of the company and all its stakeholders.
“The PIC believes the current offer for Barloworld still presents a premium to the company’s fair value, and at a premium to the pre-price offer. This is within the valuation range as recommended by the independent valuer, Rothschild. The PIC remains open to engaging all stakeholders to amicably resolve the concerns expressed to the board of Barloworld.”
