Afgri may seek poultry rival
Afgri, trading a quarter of South Africa's grain, is
considering the combination with rivals, including Country Bird Holdings and
Sovereign Foods, to help attract investors.
Afgri is in talks to merge its animal feed and chicken unit with a rival,
possibly Country Bird Holdings or Sovereign Foods, before spinning it off to
shareholders later in 2007, said CEO Jeff Wright.
With South Africa's economy growing close to the fastest pace in two
decades, Wright wants to attract investors who may sell their shares in Rainbow
Chicken, South Africa's largest poultry producer, which is being acquired by
"Spinning it out makes the business much cleaner, simpler,'' said Sasha
Naryshkine, who helps manage the equivalent of $137m at Vestact in Johannesburg.
"Chicken is a hugely cash generative businesses and bulking it up may also make
The unit spun off by Afgri may have a market value of about R1.3 billion,
said Wright. Country Bird is valued at R898 million and Sovereign Food at R480
"If we could get together with an independent company, or even a Country
Bird or a Sovereign and it made sense from a critical mass perspective, we might
do it,'' Wright said.
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