In September last year CBN reported that Senwes was in talks with Swartland-based Grainfarmers Group of Moorreesburg, which is better known as Moorreessburg Koringboere (MKB).

At that time CBN reported that it seemed likely Senwes – one of the most profitable agribusinesses in SA – would look to taking control of MKB in order to bolster its grain service capacity and stretch its reach into new geographic markets.

From what CBN can garner the board of MKB was mostly in favour of tying up with Senwes, which is understandable since the latter could add loads of efficiencies to operations that have not always delivered bumper returns.

MKB is involved in grain handling and storing (with silos spread through Bergrivier, Koperfontein, Koringberg, Leliedam, Moorreesburg and Moravia) – but also tried its hand at seed processing. MKB also owns a significant minority stake in Pioneer Foods, a dog food plant (Petfood Caterers in Moorreesburg) and holds retail outlets in Moorreesburg, Velddrif and Langebaan.

While it looked a match made in heaven, Senwes walked away from talks after MKB could not drum up enough support from its shareholders to change a long-standing regulation that restricted the ownership levels of a single shareholder to 10%.

To allow Senwes to take control or a stake of influence in MKB, shareholders obviously needed to agree to revoke the long-standing ownership regulation. CBN is led to understand the vote was less influenced by control considerations, and more by the price bandied about by Senwes (which was supposed to be considerably less than the 3700c/share value placed on MKB).

For the record, around 61% of shareholders were in favour of changing the ownership restriction, with 39% voting to retain the status quo.

Whether Senwes – which must have other acquisition targets lined up – will consider re-approaching MKB seems debatable. A more likely scenario could see another agribusiness emerging as a suitor – and CBN would probably bet on PSG-owned Zeder Investments with a long shot bet of Afgri.

But a new suitor would have to cough up for control or influence at MKB – probably substantially more than the 2550c/share that Senwes was rumoured to be offering.