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Zeder of S. Africa Accepts HCI Offer for Stake in KWV

Zeder Investments Ltd. accepted Hosken Consolidated Investments Ltd.’s offer to buy some of its shares in KWV Holdings Ltd., a South African wine and spirits company, for less than what Pioneer Food Group Ltd. offered.

HCI offered 11.80 rand per share for 21.8 million shares held by Zeder, the latter said in a statement today. That’s less than the 12 rand a share Pioneer offered on Dec. 2.

“Hosken made us an offer for that amount of shares and that is why we sold them 21.8 million shares instead of the whole stake we owned,” said Zeder investment analyst Willem Meyer in a telephone interview from Cape Town today. “KWV has increased from 6.23 rand in August 2009, so we are still happy to exit at this price.” Zeder will retain about 2 million KWV shares, said Meyer.

A bid for KWV by Pioneer, a South African food company, was abandoned last week after minority shareholders opposed it. HCI, an investment holding company with interests in gaming and South African free-to-air broadcaster etv, bought 23.2 million shares in KWV, comprising a 33.9 percent stake in the company, for 274.12 million rand ($38 million).

“We bought the stake from Zeder and other shareholders,” Chief Executive Officer Johnny Copelyn said in a telephone interview from Cape Town today. “We are a completely opportunistic investor, making investments in many companies in different industries as long as the company itself is good.”

Minorities Threshold

HCI’s holding in KWV is below the 34.9 percent threshold above which companies are required to make a mandatory offer to minority shareholders.

“KWV has just come through a period where minority shareholders were feeling they don’t want to be kicked out and we wanted to do this in a manner that’s inoffensive to shareholders who think there is future in remaining invested in KWV,” Copelyn said.

KWV’s earnings per share excluding one-time items for continuing operations may drop as much as 85 percent in first half through December, according to a statement published in the Johannesburg-based Business Day newspaper on Feb. 2.

Zeder’s remaining 2 million shares in KWV are available for sale, according to Meyer.

“Those people who said KWV was worth 18 rand a share can now put their money where their mouths are,” said Meyer.

Zeder holds 41 percent of Kaap Agri, which in turn owns 27.6 percent of shares in Pioneer.

Zeder climbed 0.8 percent to 2.70 rand by the 5 p.m. close in Johannesburg, extending its increase this year to 3.9 percent. HCI climbed less than 0.1 percent to close at 78.05 rand.

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