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The JSE's biggest food company Tiger Brands made distant second AVI's share jump nearly 42percent to an intraday high of R21 by announcing a takeover bid yesterday morning.
Tiger Brands owns grocery staples like All Gold tomato sauce, Black Cat peanut butter, Coleman's mustard, Tastic Rice and Jungle Oats.
Asked what the most attractive parts of AVI are for Tiger Brands, chief executive Peter Matlare replied: "Hot beverages. AVI is strong in tea and coffee, which complements our cold beverages. Also biscuits, which is a market we are not in at all."
AVI owns Five Roses tea, Frisco coffee, and dominates the local biscuit market with Bakers, Pyotts and Baumann's.
Tiger Brands is offering AVI shareholders R14,40 cash a share plus seven Tiger Brands shares per 100 AVI shares.
This works out to R24 per AVI share using last week's Tiger Brand share price of R137,35, but dropped to about R23,40 at yesterday's Tiger Brand intraday low of R129 on investor fears the deal will involve issuing new shares.
Matlare said there would not necessarily be a dilution because his company had been buying back its own shares.
Tiger Brands' proposed marriage with AVI faces two obstacles: the competition authorities and AVI's board.
A company spokesperson said AVI was preparing its response.
The competition authorities may be a bigger hurdle given their concern of over-concentration in South Africa's food industry. Tiger Brands has been the focal point of this, paying nearly R100million last year for its role in a bread price fixing scandal.
Matlare said legal experts Tiger Brands consulted did not believe the proposed acquisition would be blocked by competition laws.