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.