Business

Major blow for international giant paying R23 billion for South African company

Luke Fraser

 ·6 Oct 2025

The takeover of Barloworld by a consortium of investors has taken a blow, with the Takeover Regulation Panel (TRP) telling it to stick with its original payment promised to shareholders.

Barloworld is an industrial company and is the exclusive distributor of Caterpillar construction equipment in Southern Africa.

The company looks set to be acquired by Newco, which comprises Gulf Falcon Holding, a subsidiary of Saudi Arabia’s Zahid Group, and Entsha, which is linked to Barloworld CEO Dominic Sewela. 

Zahid Group offers construction, energy, manufacturing, travel, financial, hospitality, oil and marketing services.

The R23 billion deal became unconditional last week, with the sale expected to be completed by next month. 

As of today, Newco has received acceptance of the Standby Offer from 58% of the ordinary shares in issue, excluding treasury shares. 

Together with the Consortium’s and the Barloworld Foundation’s existing shareholdings, this equates to 81.4% of the Barloworld Ordinary Shares in issue, excluding Treasury Shares. 

Notably, the Standby Offer was triggered after the group’s initial Scheme Arrangement for its Offer failed to receive the requisite shareholder approval. 

The consortium has now been dealt a blow from the TRP over the amount it plans to offer shareholders.

The consortium is offering a consideration payable of R120, which is explicitly stated in its Standby Offer. 

However, it is believed that this included an automatic price adjustment for a dividend payment that applied to the Scheme Arrangement of its Offer. 

In June, Barloworld paid an interim dividend of R1.20 per share. With this, the Per Share Scheme Consideration was adjusted to R118.80. 

The Scheme did not receive the proper shareholder approval and failed, triggering the Standby Offer. 

Conflicting announcements were then made over the final consideration payable to shareholders who accepted the Standby Offer, with the finalisation announcement stating R118.80. 

However, the TRP has issued a binding ruling that the Per Share Standby Offer Consideration is R120 per Barloworld Ordinary Share, with the interim dividend not reducing the payout. 

With over 189 million shares in issue, this ruling is expected to increase the possible payout by around R225 million. 

“Although Newco disagrees with the Ruling, it has elected to proceed with settlement as it is in the best interests of shareholders to do so whilst reserving its rights,” said Newco. 

Set to be finalised next month

The failure to get the initial approval from shareholders highlights the criticism that the deal has received. 

MoneyWeb reported that shareholders rejected the deal over governance issues, especially a potential conflict of interest due to Sewela’s involvement.

Since publication, Barloworld has announced that the Standby Offer Closing Date has moved from Wednesday, 15 October 2025 to Friday, 7 November 2025, allowing shareholders more time to accept the offer: