Rainbow Chicken Ltd., a South African poultry producer, climbed to a two-month high in Johannesburg trading after saying it will buy New Foodcorp Holdings Ltd. to expand in sub-Saharan Africa.
Rainbow Chicken advanced 3.7 percent to 13.79 rand, the highest since Sept. 12. About 2.3 million shares traded, the highest daily volume this year.
The poultry producer plans a rights offer underwritten by Remgro Ltd. to fund the deal, worth more than 1 billion rand ($113 million), the Durban-based company said today in a statement. Foodcorp is the nation’s third-largest food company.
The company will embark on a series of transactions to buy London-based BlueBay Asset Management LLP’s 46 percent stake in New Foodcorp and a 22.5 percent holding owned by a Foodcorp employee trust, it said. Once completed, Rainbow Chicken will own 64 percent of Foodcorp, it said. The deal will broaden its range to add items from peanut butter and meat pies to bread and dog food.
The company’s 30-day historical volatility, a measure of stock swings, increased to 25.09 from 22.69 yesterday. The FTSE/JSE Africa All Share Index’s 30-day volatility measure was at 9.17. A higher reading means an asset’s price can have bigger moves.