Table of Contents
Key Points
- UK-based Silchester, Barloworld’s largest minority shareholder, rejects the R23.3 billion ($1.24 billion) buyout, arguing the offer undervalues the company.
- Silchester criticizes CEO Dominic Sewela’s dual role as a bidder, citing conflicts of interest and inadequate oversight from Barloworld’s independent board.
- Silchester vows to block the delisting unless the offer improves, with the consortium needing 90% approval—an unlikely hurdle without its support.
Barloworld Group, a leading industrial conglomerate led by South African business executive Dominic Sewela, is facing strong pushback against its proposed privatization and delisting.
UK-based Silchester International Investors, the company’s largest minority shareholder, has emerged as the most vocal opponent, arguing that the R23.3 billion ($1.24 billion) buyout offer undervalues the company and lacks sufficient shareholder support.
Conflict over governance and valuation
Silchester, which holds a 17.7 percent stake in Barloworld, has taken issue with Sewela’s dual role as both CEO and a key bidder in the deal. The UK-based investor argues that his involvement—alongside Saudi Arabia’s Zahid Group—raises governance concerns and compromises the integrity of the process.
“The independent board has failed in its fiduciary duty by allowing Sewela to influence the process despite his direct participation in the bid,” said Silchester director Tim Linehan. He also criticized Barloworld’s handling of conflicts of interest, stating that executives involved in the takeover should not be financially rewarded.
Shareholder showdown ahead of February vote
With a crucial general meeting set for Feb. 21, Silchester has made it clear it will vote against the delisting unless the offer is improved. The consortium needs 90 percent shareholder approval to move forward—a near-impossible hurdle without Silchester’s support.
The investor is also opposing the re-election of directors, audit committee members, and executive remuneration, citing governance failures. It insists that Barloworld should be valued at no less than R130 ($7.05) per share—well above the current R120 ($6.50) per share offer, which excludes a R3.1 ($0.17) dividend. Without a better deal, the bid is likely to collapse, forcing Barloworld to consider alternative strategies.
What’s Next for Barloworld?
Founded in 1902, Barloworld remains one of South Africa’s most respected industrial firms, with operations spanning distribution, services, and industrial processing. Sewela, who owns a 0.23 percent stake (428,401 shares worth about $2 million), has a vested interest in the company’s future.
As the Feb. 21 deadline nears, all eyes are on whether the consortium will sweeten its offer to win over investors. The outcome could set a precedent for governance and shareholder rights in South Africa’s corporate landscape. For now, Silchester isn’t backing down—signaling that unless the terms improve, the privatization bid is on shaky ground.
