Pioneer, which owns Liqui-Fruit and Sasko, is one step closer to Pepsi takeover

Pepsi transport – iStock
Pepsi transport – iStock

Pioneer Foods [JSE:PFG] says it is closer to fulfilling the conditions for its takeover by the US food and drinks giant PepsiCo for about R24.4bn. 

Pioneer, the owner of brands including Liqui-Fruit, Weet-Bix, Ceres, Sasko, and White Star entered into an agreement in July to sell all its shares to the global US food and drinks group for R110 per share in cash. 

The agreement includes a stipulation that none of three "material adverse events" take place, which have to do with Pioneer's profitability.

The JSE-listed food group, in an update to shareholders on Monday, said it had fulfilled two of the three conditions. First, it is not contemplating restating its audited financials.

Second, for the year to September 2019, it expects its consolidated earnings before interest, taxes and amortization, or EBITA, to be between R1.956bn and R2.056bn, within a range set out by PepsiCo in a previous joint circular. The US multinational had said Pioneer's consolidated EBITDA  for the 12 months could not be 10% lower than R2.055bn.

The last condition – which also has to do with EBITA – cannot be calculated yet. 

The acquisition has already been approved by the boards of both companies. Pioneer shareholder, meanwhile, will vote to proceed with the sale at the group's annual general meeting  on Tuesday in Cape Town. 

If shareholders pass the necessary resolutions on Tuesday, there are no court challenges and Pioneer fulfills all other conditions, the agreement will be finalised in the second week of February 20202.

ZAR/USD
16.76
(-0.09)
ZAR/GBP
21.15
(-0.12)
ZAR/EUR
18.93
(-0.12)
ZAR/AUD
11.64
(-0.14)
ZAR/JPY
0.16
(+0.01)
Gold
1798.22
(+0.06)
Silver
18.69
(+0.13)
Platinum
824.50
(+0.30)
Brent Crude
43.14
(+2.10)
Palladium
1961.36
(+0.61)
All Share
55417.89
(-0.66)
Top 40
51154.08
(-0.74)
Financial 15
10472.31
(+1.28)
Industrial 25
76134.69
(-1.67)
Resource 10
52483.78
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1925 votes
I am taking a hit, but should be able to recover in the next year
23% - 2529 votes
My finances have been devastated
34% - 3768 votes
It's still too early to know what the full effect will be
25% - 2701 votes
Vote