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TONGUES WAG AS KWV APPEALS HALEWOOD RULING

17 Feb KWV Holdings

Not surprisingly KWV has decided to appeal the Securities Regulation Panel’s (SRP’s) recent ruling, which requires it to treat Halewood International as a bona fide offeror and provide the UK firm with information it requests in order to make a formal offer.

Halewood, a UK-based drinks company with operations in South Africa, had requested information from KWV in December shortly after Pioneer Foods announced its bid for KWV.

When KWV refused, Halewood approached the SRP in terms of rule 16.4 of the securities regulation code, which deals with the obligation to provide equal information “to a less-welcome but bona fide offeror or potential offeror”.

Last week the SRP ruled that Halewood had to be treated as a bona fide offeror; this was despite the fact that Pioneer had announced that it had withdrawn its offer.

KWV sources, who are dismissive of Halewood’s desire or ability to acquire the local wine and spirits company, argue that Halewood was merely intent on using the Pioneer offer to trigger rule 16.4 and get access to intelligence about the industry.

Halewood supporters counter that in view of KWV’s dismal operating performance there would be little chance of it providing anyone with useful “intelligence”.

The legal tussle at the SRP is likely to drag on for long enough to render pointless any “intelligence” that KWV has to offer.

And meanwhile fresh from its success with Tsogo Sun, Hosken Consolidated Investments (HCI) emerges as the proud owner of a third of KWV.

The suddenness of the KWV purchase has sparked all sorts of speculation that HCI is warehousing KWV for its mates at Rembrandt Group. The opportunistic HCI has not shown any interest in wine and spirits but it isn’t too much of a stretch to see alcohol and casinos in the same group.

Edited by Peter DeIonno. With contributions from Ann Crotty, Roy Cokayne and Ethel Hazelhurst.

Source: Business Report