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It doesn't necessarily mean that the AVI board has changed heart about rejecting Tiger Brands's R8bn -- 60% cash and 40% stock -- offer to buy AVI. And it also doesn't necessarily mean that Tiger Brands has found the cash to fund such a bid either.
What's clear is that Tiger has not yet made a formal offer, as the cautionary announcement still speaks about a "potential offer". What other form of formal communication could there be between the parties then?
A statement highlighting the benefits of the proposals, or it may have been a change to the suggested terms of the proposal?
Tigers's initial takeover proposal was pitched at an AVI share price of R24 a share, which, when the announcement of a proposed bid was made last year, represented a 62% premium to AVI's share price at that time.
But that inducement has since narrowed as AVI was trading at R21 yesterday -- close to its 12-month high of R21,75. Also, the economy has worsened quite rapidly since the first offer was made last year, but food-related companies appear to have ridden out a period of rapidly weakening consumer spending quite well.
AVI's share price hasn't moved much this year, but has actually held up well relative to the rest of the stock market, indicating a relatively stronger investment rating.
In light of this, there's probably a case to be made that Tiger should consider raising its offer. The times have changed since that first offer was made.
Still, what is clear is that Tiger is not giving up on this potential deal just yet.
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