Country Bird Holdings (CBH) will not take a takeover special committee’s decision on review until Sovereign Food’s application to the Competition Commission has been finalised.
In a Sens announcement issued on Friday, CBH said it "is firmly of the opinion that the Sovereign application has no prospect of success and that the CBH offer still has the potential to be implemented".
The announcement highlights the litigious nature of a deal that has been on the cards for more than a year but has been dogged by one legal challenge after another as Sovereign battles off its unwanted suitor.
In November, Sovereign filed a review application with the Competition Commission in a bid to get the watchdog to set aside an earlier decision that a merger between Sovereign and CBH would not be anticompetitive. A month earlier, a special committee of the Takeover Regulation Panel ruled, in response to an approach by Sovereign, that CBH’s R9-per-share cash offer to Sovereign shareholders had lapsed on September 14.
The offer lapsed when CBH, after acquiring 34.1% of Sovereign, said it was waiving its acceptance conditions. In an evident oversight, CBH had not reserved the right to waive conditions when it made the conditional offer. In terms of Takeover Regulation Panel rules, this meant CBH was obliged to wait for 12 months before it could make another offer. CBH cannot take its stake above 35% until after September 13.
Friday’s Sens announcement by CBH was to inform Sovereign shareholders that it would wait until after the Competition Commission had ruled on Sovereign’s review application before it would consider taking the decision of the Takeover Regulation Panel’s special committee on review.
It is unclear when the commission will announce its decision, but CBH has 180 days from the date when the special committee provided its reasons to launch a judicial review.
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