JOHANNESBURG (Reuters) -Shares in South Africa’s Imperial Logistics jumped almost 34% after Dubai’s DP World said it would pay up to $887 million to acquire the company’s outstanding shares.
Global supply chain group DP World said early on Thursday that it had made a cash offer of 12.73 billion rand ($887 million) to acquire all the shares of the South African company.
The acquisition, giving DP world a stronger foothold in the African continent, will be at a premium of about 40% to the closing price of Imperial on July 7, the company said.
The acquisition provides significant strategic value by complementing the DP World group’s existing footprint in Africa and Europe and enabling delivery of an end-to-end solution to cargo owners across a wide and highly competitive market, the two companies said in a joint statement.
The statement said the deal demonstrates DP World’s long-term confidence in the South African economy and wider regional market despite the challenges of the COVID-19 pandemic.
Imperial will be delisted after the acquisition.
Imperial offers logistical support across healthcare, consumer, automotive, chemicals and industrial commodities, with operations spread across 26 countries in Africa and Europe.
The company had said earlier this year that it would look to exit its European operations as part of its strategy to focus more on Africa, especially an expansion in Ethiopia and French-speaking African countries.
Imperial’s share price tumbled in the market crash of March year, but its market value has since doubled.
Its shares were trading at 63 rand, up 33.5%, at 0940 GMT.
($1 = 14.3513 rand)
Reporting by Promit MukherjeeEditing by David Goodman