Barloworld’s unceremonious exit from the JSE

In the end, it turned out to be a reasonably rapid conclusion to the transaction. It’s not entirely done yet – there are a few loose ends to tie up – but they’re purely procedural.

And so, Barloworld is now just weeks away from being delisted from the JSE.

The bid by the Newco consortium to acquire control of Barloworld was in the bag by midday on Friday, just days short of 12 months since details of the potential offer were first announced.

According to a Sens statement, the consortium now owns 134.2-million Barloworld shares, equivalent to 70.8% of the total share base. This was comfortably above the 131-million needed to squeeze out the minorities. Adding the 44-million Barloworld shares already owned by the consortium brought the total to 94.1% of the shares.

Analysts reckon most of the “missing” 5.9% are held by retail investors who may not even be aware they are invested in Barloworld. It’s certainly unlikely that any of them plan to launch an appraisal action. South African law provides no such mechanism in these circumstances – and while there is international precedent, it would involve a long, costly court battle, hardly feasible for a shareholder with such a small stake.

All in all, given that cross-border transactions can drag on for years, the time it took to close this deal wasn’t bad. It helped that the competition authorities pushed it through within a few months. That may have been inadvertently accelerated by the outcry over delays in finalising the Vodacom-Remgro fibre deal.

For several weeks, the Competition Commission and the Competition Tribunal were subjected – generally unfairly – to criticism from commentators, the media, and parliamentarians about the pace at which they were signing off on deals. It happened to coincide with their review of the Barloworld transaction.

From a competition-law perspective, it was a straightforward deal. The only potential hurdle was on the public-interest front, avoided thanks to an agreement between Newco and the Public Investment Corporation, then Barloworld’s largest shareholder. That deal required Newco to make provision for a broad-based black economic empowerment investor to be included.

Original deal a ‘mess’

The speed of the conclusion is all the more surprising given how messy it originally appeared. Not only were there numerous conditions attached to the initial offer, but it was overshadowed by one major corporate-governance concern.

A trust intended for the benefit of Barloworld CEO Dominic Sewela and his family had teamed up with Saudi Arabia’s Zahid Group to form the Newco consortium that launched the bid. It emerged that Sewela had been in discussions with Zahid for several months before any public statement was made – and before an independent committee had been established to oversee the transaction.

“It was a massive conflict of interest,” said one analyst.

Newco’s attempt to portray Sewela’s involvement as a management buyout did little to placate investors – especially since Sewela was the only member of management involved.

The apparent generosity of the offer – R120 a share versus a ruling price of about R80 – helped quiet some opposition.

Not all shareholders were convinced. Silchester International Investors, the UK-based fund that was Barloworld’s second-largest shareholder with a 17.7% stake, said it would not tender its shares unless offered at least R130. Silchester also criticised the Barloworld board for failing to provide proper oversight of the company, its management and its CEO. (The recent announcement of the unexpected departure of group CFO Nopasika Lila, effective end-November, will not have calmed governance concerns.)

The lack of oversight was also evident in the dispute over the dividend paid in June. Newco advisers claimed they were entitled to deduct the R1.20-a-share dividend from the R120 offer. They said as much in every press release issued since August, though the statement never appeared in any Sens announcement – or in the shareholder circular released earlier in the year.

The Takeover Regulation Panel, which must give final sign-off, stepped in and told Newco it had no choice but to pay the full R120 a share. Coincidentally – or not – there have been no further press releases since.

Meanwhile, in October, Silchester changed course and accepted that the offer was good enough, effectively ensuring that the 90% threshold needed for delisting would be reached. With Silchester on board, there was also no prospect of a higher offer emerging within 12 months.

And so, in early 2026, Barloworld will disappear from the JSE.

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