Barloworld Buyout Clears Key Hurdle as 90% Acceptance Condition Is Waived

The proposed R23.3 billion acquisition of Barloworld remains on course, following a key concession by the management-led consortium spearheading the transaction. In a joint statement this week, Barloworld and the consortium confirmed that the 90% minimum acceptance condition tied to the standby offer has officially been waived.

This development clears a major hurdle in the transaction’s path, effectively ensuring that the offer, priced at R120 per ordinary share, can proceed once all remaining conditions are either fulfilled or waived.

The offer is being led by CEO Dominic Siwela in partnership with Saudi Arabia’s Zahid Group, via a special purpose vehicle named Newco. Current acceptances of the offer, along with the shareholdings of the Public Investment Corporation (PIC), the Barloworld Foundation, and the consortium itself, represent a combined 57.7% of Barloworld’s issued ordinary shares which is comfortably above the revised 51% threshold now required for the deal to proceed.

To accommodate the revised structure, the acceptance deadline has been extended to coincide with the fulfilment of the final outstanding conditions precedent. Should these conditions not be met by the extended deadline, the consortium has committed to paying Barloworld a break fee of R20 million.

The PIC, which holds a 22% stake and is Barloworld’s largest shareholder, was initially hesitant due to governance concerns. However, after constructive engagement, it endorsed the offer – contingent on Newco’s commitment to implement a 13.5% broad-based black economic empowerment (B-BBEE) transaction post-delisting from the JSE and A2X.

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Support for the transaction has also come from key industry stakeholders, including US-based Caterpillar, Barloworld’s principal supplier. Caterpillar’s backing of the deal and its emphasis on continuity and local empowerment has added further credibility to the proposed buyout.

The Competition Commission has recommended the transaction for approval by the Competition Tribunal, subject to public interest undertakings – including the B-BBEE implementation.

With the waiver of the 90% condition and continued progress on regulatory and stakeholder fronts, the transaction appears increasingly likely to reach completion in the near term.