A unit of Saudi Arabia\u2019s Zahid Group and its local partners offered to buy all shares in South Africa\u2019s Barloworld Ltd. <\/p>\n\n\n\n
A group that includes Gulf Falcon Holding Ltd. \u2014 a wholly owned unit of Zahid \u2014 and Entsha Ltd., an entity linked to Barloworld Chief Executive Officer Dominic Sewela, has made an offer of 120 rand per share, Barloworld said in a statement Wednesday. <\/p>\n\n\n\n
The stock surged as much as 19% in Johannesburg.\u00a0<\/p>\n\n\n\n
The offer won\u2019t be reduced by the 3.10 rand dividend the firm declared on Nov. 22, which takes the total so-called \u201cvalue unlock\u201d to 123.10 rand per share. <\/p>\n\n\n\n
This translates into an 87% premium to Barloworld\u2019s 30-day volume-weighted average price before it told shareholders to exercise caution in trading in April.\u00a0<\/p>\n\n\n\n
\u201cZahid Group is a long-term shareholder of Barloworld and believes in the fundamental strengths of Barloworld,\u201d the company said. <\/p>\n\n\n\n
The Johannesburg-based firm that is the African distributor of\u00a0Caterpillar Inc.\u00a0equipment (a leading manufacturer of construction and mining\u00a0equipment) will be taken private if the deal goes ahead, it said.<\/p>\n\n\n\n
Middle Eastern firms have\u00a0increasingly\u00a0sought investments in Africa, jockeying for influence with established players like China and France.\u00a0ACWA Power, a Riyadh-based company, has signed a memorandum of understanding to invest $10 billion in South Africa\u2019s renewable-energy industry over the next decade, while Dubai-based logistics company\u00a0DP World\u00a0operates nine ports on the continent.<\/p>\n\n\n\n
The Saudi group, a distributor of heavy equipment machinery, started\u00a0buying\u00a0Barloworld shares four years ago. Zahid Tractor and Heavy Machinery Co., owns\u00a018.9%\u00a0of the South African company.<\/p>\n\n\n\n
Barloworld is the official\u00a0Caterpillar\u00a0dealer in several African nations including Zambia, the Democratic Republic of Congo, Malawi, Angola and South Africa. It also has a business in Russia that\u2019s been subject to an internal investigation into possible export violations.<\/p>\n\n\n\n