(Ecofin Agency) - In South Africa, Illovo Sugar’s shareholders received a new bid from British firm Associated British Foods (ABF). The new offer outweighs the R20/share offer that the British firm who has a 51% stake in Illovo, and wants to acquire the remaining shares, submitted last February.

As share’s price surpassed its offer, ABF was forced to raise it to R25/share. The new offer has already been approved by institutional shareholders like Allan Gray, Investec Asset Management and Kagiso Asset Management, who holds 54% of Illovo’s outstanding shares.

Chris Logan, CEO of Opportune Investments, said “it looks like a good offer for a good company in a bad time for the sugar company”.

Analysts believe that weak exchange rate for rand, structural challenges the local sugar industry faces and upcoming termination of European strategies on sugar quotas will favor the British company. ABF’s head John Bason considers Illovo an important asset for his group. He believes he can reinforce the sugar company’s pre-eminence in the African market, despite the challenging environment. Biggest sugar producer, Illovo harvested last year 6.3 million tons of sugar cane and produced 1.3 tons of unrefined and refined sugar.

In the case ABF’s offer is accepted, it plans to un-list Illovo from Johannesburg Stock Exchange (JSE).

Aaron Akinocho