Jan. 24 (Bloomberg) -- Hosken Consolidated Investments Ltd., a South African investment company with stakes in businesses from casinos to television, said it won’t increase its offer for KWV Holdings Ltd., the country’s second-largest wine and spirits producer, even after a shareholder reportedly rejected the bid.
HCI first acquired a stake in Paarl-based KWV in February last year. On Dec. 21 it offered to buy full control after its indirect stake exceeded 35 percent, triggering a mandatory offer to shareholders, according to South African securities law. HCI said it will offer 8.50 rand a share in cash, or about 580 million rand ($73 million). A KWV shareholder, Withmore Investments, said the offer is too low, according to Business Report newspaper, citing Withmore’s chairman, Khutso Mampeule.
“We are absolutely not offering more for the business, we are just complying with the regulations,” HCI’s Chief Executive Officer Johnny Copelyn said in a telephone interview from India today. “If shareholders don’t have confidence in HCI’s ability to fix KWV then it would be silly for them to stay. I don’t believe Withmore would hinder us from trying to fix the business.”
Withmore holds more than 18 percent of KWV, according to the wine company’s website. KWV, which last traded over-the-counter at 8.80 rand a share, made an adjusted operating loss of 53 million rand in its core business for the fiscal year to June 2011, compared with a 32 million-rand profit a year earlier. The company’s shareholders have until March 2, a week after KWV’s half-year results are released, to accept or reject HCI’s price.
Mampeule did not immediately return a message left on his mobile phone.
KWV exports wine brands including Roodeberg and Cathedral Cellar and is almost 100 years old.
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