The Competition Commission has approved the takeover by Magister Investments intends of Tongaat Hulett, pursuant to its participation in and partial underwriting of the sugar giant’s proposed rights offer to shareholders.
In a separate process last week the Takeover Special Committee considered the Takeover Regulation Panel’s decision to release Magister from the obligation to make a mandatory offer to shareholders for the JSE-listed sugar producer and property company.
A consortium of shareholders including Artemis Investments had appealed to the department of trade, industry & competition’s panel in a last-ditch effort to halt Tongaat’s bid to undertake a R4bn rights issue that will see Tongaat taken over by the Zimbabwean Rudland family.
Tongaat said a determination is expected on or about March 8.
The competition commission on Monday raised concerns about the likely effect of the proposed transaction on employment, the promotion of a greater spread of ownership, the sugar value chain and the region.
The body approved the transaction on condition that the merged parties will not retrench employees for at least three years while it requires Tongaat to sell at least 20% of its land holdings to historically disadvantaged people, should it ever decide to sell the business.
The commission also stipulated that the merging parties establish an employee share ownership plan that will hold an effective 5% in the SA operating subsidiary of Tongaat for three years of the takeover.
Tongaat’s share price rose 1.01% to R3.99.
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