Yahoo Finance

(Bloomberg) -- Saudi Arabia’s Zahid Group will start fresh negotiations with the shareholders of South Africa’s Barloworld Ltd., after an initial acquisition offer was rejected.

Most Read from Bloomberg

• NJ College to Merge With State School After Financial Stress

• Trump Administration Plans to Eliminate Dozens of Housing Offices

• NYC Congestion Pricing Toll Gains Support Among City Residents

• Where New York City's Zoning Reform Will Add Housing

• Buffalo’s Billion-Dollar Freeway Fix Is on Ice, But Not Because of Trump

The consortium led by Zahid will seek to buy as many shares as possible so that its stake exceeds 50% in the distributor of Caterpillar Inc.’s equipment in Africa, Zahid’s head of investments, Augostino Sfeir, said in an interview. Zahid, which owns 19% of Barloworld, failed to get shareholder approval to acquire all the shares in the South African company, triggering a standby offer.

“We are moving forward with the transaction even if we do not take the company private, we think a majority shareholding will allow us to implement more efficient processes in the business,” said Sfeir. “The standby offer has now opened, and we would like to conclude it within 30 trading days.”

Zahid expects at least another 32% support from shareholders in line with a vote at a previous extraordinary general meeting, he said.

Sign up for the twice-weekly Next Africa newsletter for the latest business and economic news from the continent.

Barloworld’s shares jumped 5.5% at 3:38 p.m. in Johannesburg, the most since Dec. 11, recouping most of the losses since Zahid’s offer was rejected on Feb. 28.

Zahid’s Gulf Falcon Holding Ltd. and Entsha Ltd., an entity linked to Barloworld Chief Executive Officer Dominic Sewela, announced the initial offer in December. At the time, the bid was a 30% premium to the day’s closing price. The offer price will remain at 120 rand a share that values the company at $1.25 billion, said Sfeir.

Discussions with Barloworld’s biggest shareholder, the Public Investment Corp. will also include options to further invest in Black-ownership requirements, said Sfeir.

Africa’s top fund manager, which oversees 3 trillion rand ($162 billion) of assets including about 22% of Barloworld, had rejected the takeover offer and preferred transactions that were more inclusive.

“The benefit of empowerment or any transactions should cover a wide range of stakeholders,” it said at the time.

The PIC and Silchester International Investors LLP, which also rejected the initial offer, previously raised concerns about Sewela being part of the company during negotiations, citing a conflict of interest.