VKB BELEGGINGS PROPRIETARY LIMITED (“VKB”) ACQUIRES 21% SHAREHOLDING IN BKB LIMITED (“BKB”)
It is with great excitement that the Board of VKB Beleggings (Pty) Ltd announces that after successful negotiations, VKB entered into agreements in terms of which VKB purchased 21.05% of the issued shares in BKB. BKB and VKB also agreed to enter into negotiations regarding a possible opportunity to investigate synergies between their respective businesses and/or certain of their operations during the discussion period which will end on 29 February 2020, as a joint effort to investigate an appropriate structure for a potential combination transaction. If the parties do not reach agreement during this period, BKB has the right to repurchase the BKB shares held by VKB, and VKB likewise has a similar right to resell its shares in BKB to BKB.
In terms of the agreement, VKB has the right to acquire further shares from BKB shareholders offering their shares for sale during the discussion period, subject to VKB's shareholding not exceeding 30% of the issued shares in BKB without the consent of the majority of the directors of BKB, and at a price of at least R16 per BKB share.
In terms of representation, it was agreed that for as long as VKB holds at least 20% of the issued shares in BKB, two suitably qualified and experienced VKB nominees will be appointed to the BKB Board of Directors. Messrs Paul Carshagen and Koos van Rensburg were nominated by VKB's Board for this purpose.
Mr. Paul Carshagen, Chairman of the Board of Directors of VKB Beleggings (Pty) Ltd, desribed the transaction as follows:
“VKB is a proud agri-business with a rich history of 100 years and its shareholders being commercial agri-producers. One of VKB’s strategic goals is aimed at becoming involved in the livestock industry especially considering that the majority of VKB’s commercial agri-producers’ farming operations also include largescale livestock farming components.
The opportunity presented to VKB to invest in BKB is a major step towards achieving this strategic goal of VKB which we believe will also contribute to BKB’s business through our collective efforts.
However, our investment in BKB offers substantially more than a mere financial investment as we believe it serves as a solid foundation to unlock the synergies that exist between BKB and VKB for the benefit of both the commercial agri-producers in South Africa as well as the shareholders of BKB and VKB.
Considering the vast geographical areas within which BKB and VKB respectively operate, it also presents the ideal opportunity to jointly focus on VKB and BKB’s strengths by learning from one another’s bespoke competencies aimed at ultimately complementing our respective businesses. In addition, the industries of BKB and VKB also provide the potential for greater marketing opportunities for the variety of products which VKB and BKB each offer.
Through this investment in BKB, VKB is thankful for the opportunity to pursue the realisation of our strategic ambitions and could not have asked for a better “partner” being also a 100-year-old business such as BKB to jointly lay the foundation for the next 100 years. We look forward to an excellent relationship.”