Afgri may seek poultry rival

01-06-2007 | |
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 Remgro.
“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 it.”
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 million.
“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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