Heineken buyout talks with Savanna producer Distell drawn out as PIC clamps ready

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According to person’s familiar with the situation, Heineken’s talks to purchase Distell Group Holdings have been delayed because the South African beverages company’s second-largest stakeholder is demanding a higher price.

The Public Investment Corporation (PIC), Africa’s largest money manager, is holding out for around R200 per share, according to the persons, who wanted to remain unnamed since the talks are still confidential.

This is 9.4% more than Distell’s closing share price on Tuesday, valuing the Stellenbosch-based wine and alcohol company at R44.6 billion.

They stated that discussions are still underway and that no final decision has been taken. Heineken’s tabled bid has not been made public.

Questions were directed to Distell and Heineken, the world’s second-largest brewer. Distell declined to comment on the talks, instead referring to a regulatory statement issued in September, which stated that while satisfactory progress had been achieved, a number of concerns remained to be resolved.

Heineken did not reply quickly to a request for comment. According to sources provided, the PIC owns 30% of Distell. Remgro Ltd., an investment organisation led by billionaire Johann Rupert, is the largest stakeholder and has declined to comment.

In May, Heineken approached the maker of Klipdrift brandy, Nederburg wine, and Savanna cider about purchasing the majority of the company. Since then, the stock has risen by approximately 26%.

According to the sources, in order to comply with competition regulations, some products, such as Amarula cream liqueur, will have to be separated, and discussions are currently taking place about how this could be done.

Story by : Norvisi Mawunyegah