(Ecofin Agency) - In South Africa, Associated British Foods who holds a 51.35% stake in Illovo Sugar said it wishes to buy the rest of sugar producer. This offer comes as Illovo’s share, over the past year, lost about half of its value due to the severe drought that South Africa currently faces.

ABF’s offer is 20% higher than Ilovo’s share average value over the last three months says John Bason who heads finances at the company’s headquarters. However, analysts say the offer is only 9% higher than the actual value the share. Due to this, many believe ABF’s offer will be rejected by minority shareholders.

According to Sumil Seeraj, analyst at Standard Bank, an offer of 20 Rand per share is unlikely to seduce the other shareholders. “I really believe this offer will be rejected,” he said.

In response to accusations claiming that ABF’s offer is opportune, Jason Bason said: “Our offer aims to offend nobody”.

Illovo  Sugar  is one of South Africa’s main sugar producer.

Aaron Akinocho