PIC Rejects Barloworld Takeover in South Africa Over Governance Concerns
State-owned asset management firm, the Public Investment Corporation (PIC), which holds a 21.97% stake in industrial equipment and services company Barloworld, has confirmed voting against the proposed takeover of the company at R123.10 per share.
The PIC also exercised its right to vote against board members up for re-election at Barloworld’s Annual General Meeting (AGM) on February 21.
In a statement, the PIC emphasized its mandate to generate value and financial returns for its clients while ensuring positive socioeconomic outcomes.
While acknowledging that the offer price represented a premium within the valuation range recommended by independent valuer Rothschild, the PIC expressed concerns over corporate governance at Barloworld and the process followed by its board in considering the transaction.
“The PIC does not typically comment on specific transactions. However, given the significant media attention and the gravity of the issues raised, a public statement is warranted,” the corporation stated.
The PIC noted the strategic direction of OEM Caterpillar in increasingly transferring dealership operations into private hands but reiterated its concerns about governance practices at Barloworld.
These concerns were communicated to the board through multiple engagements, and the PIC intends to continue discussions.
The PIC expects the boards of its investee companies to act in the best interests of both the companies and their stakeholders. It also reaffirmed its support for broad-based empowerment initiatives in South Africa, advocating for transactions that benefit a wide range of stakeholders.
On February 26, shareholders voted on the proposed buyout of Barloworld by a consortium including the company’s management and Saudi Arabian group Zahid. However, less than 37% of shareholders supported the transaction, effectively blocking the deal.
