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BARLOWORLD LIMITED

BAW JSE Listed
Market Cap
~R22.4 Billion (At Suspension)

Role: Senior Equity Analyst (JSE Focus) Date: 12 January 2026 Subject: Investment Analysis – Barloworld Limited (JSE: BAW) – URGENT UPDATE: DELISTING

🚨 CRITICAL ALERT: SUSPENSION & IMMINENT DELISTING

Status: TRADING SUSPENDED (Effective 28 Nov 2025) Action: DO NOT BUY / AWAIT COMPULSORY ACQUISITION Barloworld Limited is currently in the final stages of a "Take-Private" transaction. A consortium ("Newco") has secured over 90% of the shares and has invoked Section 124 of the Companies Act to compulsorily acquire all remaining shares and terminate the JSE listing. The analysis below is provided for historical context and for existing shareholders awaiting their final payout.

Step 1: Data Gathering & Source Verification

I have utilized the following primary sources for this analysis, reflecting the company's final reporting periods as a listed entity.

Step 2: Metric Extraction

Market Cap: ~R22.4 Billion (At Suspension)

  • Value: Based on the final suspended price of R118.30.

Dividend Yield (L12M): 1.0% (Nominal)

  • Calculation: Total dividend declared in FY25 was 120 cents per share.
  • Note: Dividends are largely irrelevant now as the "exit price" is the primary return mechanism for shareholders.

Liquidity Check: FROZEN (Suspended)

  • Status: Trading was suspended on the JSE at the close of business on Friday, 28 November 2025. You cannot currently buy or sell this stock on the open market.

P/E Ratio: 15.2x

  • Calculation: Suspended Price (11,830c) / FY25 HEPS (776c).
  • Context: The valuation is effectively "pegged" to the buyout offer price rather than earnings fundamentals.

Net Asset Value (NAV): 9,141 cents (R91.41)

  • Compare: The buyout price (~R118-R120 range) represents a premium to the book Net Asset Value, which is typical for a control transaction.

Step 3: Operational & Strategic Analysis

Business Overview

Barloworld is (was) a leading industrial processing, distribution, and services company.

  • Equipment: The official Caterpillar (CAT) dealer for Southern Africa, Mongolia, and Russia (Vostochnaya Technica - though this has been a source of significant geopolitical pain).
  • Consumer Industries: Ingrain (starch and glucose manufacturing).

Performance Trend (Final FY25 Results)

The company exited the public market on a downward operational trend, justifying the board's decision to accept the buyout.

  • Revenue: Declined 10.0% to R37.7bn in FY25.
  • Drivers: The decline was driven by the "normalization" of activity in Mongolia (coming off a high base) and continued weakness in the Southern African mining sector where customers delayed capital expenditure (Capex).
  • Russia Exposure: The Vostochnaya Technica (Russia) division has been effectively ring-fenced and de-risked, but it dragged down group optics for years.

Sector Context: The "De-Listing Trend"

Barloworld joins a growing list of mid-cap SA Inc. companies leaving the JSE (alongside names like Long4Life and others).

  • Macro Factor: Valuations on the JSE have been persistently low compared to global peers. Private Equity consortia are capitalizing on this by taking solid, cash-generative businesses private, believing they can unlock more value away from the public eye and quarterly reporting pressures.

Step 4: The Verdict

Bull Case: The "Squeeze-Out" Check

If you still hold shares, the "Bull Case" is simply that you will receive a guaranteed cash exit. The consortium has legally triggered the compulsory acquisition. You do not need to do anything; the cash (likely at the offer price, approx. R118.30 - R120.00) will be credited to your brokerage account, and the shares will be removed.

Bear Case: "Dead Money"

The risk is purely regarding time. Your capital is currently frozen. You cannot sell the shares to re-allocate the funds until the administrative "squeeze-out" process concludes, which can take weeks. You earn 0% interest on this capital while it sits in limbo.

Fair Value Estimate

R118.30 (Market Price)

  • Analysis: The market has efficiently priced the stock exactly at the takeover value. There is no remaining upside or downside variance.

Final Rating: DELISTED / AWAIT PAYMENT

  • Action: Do not attempt to trade. If you are a holder, look out for correspondence from your broker regarding the "Section 124 Compulsory Acquisition" payout. This is the end of the road for Barloworld as a public entity.
AI Generated Analysis Last Updated: 2026-01-14