Heineken takeover talks with Savanna maker Distell drawn out as PIC holds out

play article
Subscribers can listen to this article

Heineken’s talks to acquire Distell Group Holdings have been prolonged as the South African drinks maker’s second-largest investor is asking for a higher price, according to people with knowledge of the matter.

The Public Investment Corporation (PIC), Africa’s biggest money manager, is holding out for about R200 a share, said the people, who asked to remain anonymous as the talks are still private. That is 9.4% higher than Distell’s closing share price on Tuesday and would value the Stellenbosch-based wine and spirits company at R44.6 billion. 

Talks are ongoing, they said, and no final decision has been made. Heineken’s tabled bid hasn’t been disclosed.

The PIC referred questions to Distell and Heineken, the world’s second-largest brewer. Distell declined to comment on the talks, referring only to a regulatory statement released in September that said while satisfactory progress had been made, a number of issues still needed to be agreed. Heineken didn’t immediately respond to a request for comment.

The PIC owns a 30% stake in Distell, according to data compiled by Bloomberg. The largest shareholder is Remgro Ltd., an investment group of billionaire Johann Rupert, which declined to comment.

Heineken approached the maker of Klipdrift brandy, Nederburg wine and Savanna cider about the possible purchase of most of the business in May. The shares have climbed about 26% since that announcement.

To comply with competition requirements, some brands such as Amarula cream liqueur will have to be separated and talks are being held over how this should be done, said the people. 

The PIC increased its stake in Distell in 2017 after a shakeup of the drinks maker’s ownership structure, paying R170 a share. South Africa is one of Heineken’s better performing markets, where beer volumes grew by almost a half in the third quarter, and the Dutch brewer has made a separate offer to increase its stake in neighbouring Namibia. 

Distell didn’t pay a dividend for the financial year through June as a condition to Heineken’s takeover proposal, but said it will declare a payout if the talks are terminated.

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
Rand - Pound
Rand - Euro
Rand - Aus dollar
Rand - Yen
Brent Crude
Top 40
All Share
Resource 10
Industrial 25
Financial 15
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders