Brimstone confirms exit from Clover deal
By Karl Gernetzky - Apr 12th, 10:01
Brimstone Investments confirmed that it will not be participating in a consortium seeking to acquire SA’s biggest dairy producer Clover, but had agreed on a plan to facilitate its exit.
Brimstone was in advanced talks with a replacement black empowerment partner for the consortium after giving up on the deal in the wake of protests over the participation of an Israeli company.
Brimstone, which was due to have a 15% stake in the MilCo consortium, may still hold a stake in Clover but was negotiating with Nigeria-based International Beer Breweries Limited (IBBL) over a “back-stop” agreement as it seeks a replacement empowerment partner.
Under the terms of the proposed agreement, IBBL would acquire Brimstone’s stake on December 31 2019, should Brimstone not find someone else to acquire it.
Brimstone announced it was reviewing its participation in February, after lobby group Boycott, Divestment and Sanctions (BDS) concerns over the participation of Israel-based Central Bottling Company, led to Clover’s share price dropping by the most since October.
The Israeli company has a 59.5% stake in the consortium.
Other members are Ploughshare Investments, which will acquire 10.9%, and IncuBev with 8.3%. Management is due to retain a 6.3% stake.
Brimstone said on Friday negotiations with a potential replacement empowerment stakeholder were in an advanced stage, adding that the transaction costs related to any deal were not expected to significantly affect the company’s financial position.
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