Burger King South Africa deal re-negotiated on lower enterprise value terms
Listed empowerment group Grand Parade Investments (GPI) has had to renegotiate the terms of its agreement to sell its interest in Burger King South Africa (BKSA) and Grand Foods Meat Plant (GFMP) to private equity group Emerging Capital Partners.
The decision to renegotiate the deal was owing to Covid-19 and the impact that the lockdown has had on the businesses.
Under the revised offer, the enterprise values are R570-million for BKSA and R23-million for GFMP, representing a 15% discount on the initial offer of R670-million for BKSA and R27-million for GFMP.
The deal has also been renegotiated on a cash basis with no earnings warranties, as opposed to the initial offer which was subject to an earnings warranty for the 2020 financial year.
GPI CEO Mohsin Tajbhai says that, although the offer is discounted compared with the initial offer, it is still fair given the additional risk and uncertainty caused by the pandemic.
The current deal equates to more than R1 a share in value to GPI shareholders and is in line with GPI’s strategy to unlock value through the controlled sale of assets. The conclusion of the sale will allow GPI to reduce gearing and return capital to shareholders through a special dividend.
Meanwhile, Emerging Capital MD Paul Maasdorp says the company’s ambition remains the same, to bring BKSA products closer to consumers and local communities in South Africa, while enabling the iconic brand to grow in terms of employment and product offering.
Comments
The
functionality
you are trying to access is only available to subscribers.
If you are already a subscriber, you can Login Here.
If you are not a subscriber, you can subscribe now, by selecting one of the below options.
For more information or assistance, please contact us at subscriptions@creamermedia.co.za.
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation