Consol has accepted a ZAR 6.08 billion takeover bid from investors led by private equity firm Ethos Private Equity Fund V and the Ontario Teachers“ Pension Plan (OTPF), Africa“s biggest glass maker …
Consol has accepted a ZAR 6.08 billion takeover bid from investors led by private equity firm Ethos Private Equity Fund V and the Ontario Teachers“ Pension Plan (OTPF), Africa“s biggest glass maker said 4 December 2006. Ethos and partners had offered ZAR 19.24 a share, 60% more than the price on 19 July 2006, the day before Consol first said it was in bid talks. “It“s a knockout,” said Warwick Lucas, an investment analyst at Imara SP Reid, with a “hold” recommendation on the stock. “I don“t think they are going to have too much trouble getting acceptances”. South Africa“s glass making industry has benefited from rising consumer demand, prompted by the increased wealth of the black majority. Nampak, Africa“s largest packaging company, agreed in 2005 to sell half of its glass unit to Germany“s Wiegand-Glas for EUR 18 million (ZAR 171 million). Ethos“s partners in the bid are the OTPF, Canada“s third-biggest retirement-fund manager; Sphere Private Equity Fund I; Sphere Investments (Proprietary); and Sanlam Life Insurance. They will all provide equity funding. Rand Merchant Bank, the investment-banking unit of FirstRand, has underwritten the debt funding. Consol said its board would recommend the takeover proposal to shareholders after Nedbank assessed the bid and found it to be “fair and reasonable”. Consol, which has 75% of the South African glass market and makes 90% of its sales from glass, was spun off by food maker AVI in February 2005. The company has a technology sharing agreement until 2016 with Ohio-based Owens-Illinois, the world“s largest maker of glass bottles. Public Investment Corporation is currently Consol“s largest shareholder with 15%, according to Mike Arnold, Consol“s managing director. Old Mutual Asset Managers holds 8%, followed by Liberty Life (6 %) and Metropolitan Asset Managers (4.5 %).