Saudi Arabia’s Zahid Group will start fresh negotiations with the shareholders of South Africa’s Barloworld, after an initial acquisition offer was rejected.

The consortium led by Zahid will seek to buy as many shares as possible so that its stake exceeds 50% in the distributor of Caterpillar Inc.’s equipment in Africa, Zahid’s head of investments, Augostino Sfeir, said in an interview. Zahid, which owns 19% of Barloworld, failed to get shareholder approval to acquire all the shares in the South African company, triggering a standby offer.

“We are moving forward with the transaction even if we do not take the company private, we think a majority shareholding will allow us to implement more efficient processes in the business,” said Sfeir. “The standby offer has now opened, and we would like to conclude it within 30 trading days.”

Zahid expects at least another 32% support from shareholders in line with a vote at a previous extraordinary general meeting, he said.

Zahid’s Gulf Falcon Holding and Entsha, an entity linked to Barloworld CEO Dominic Sewela, announced the initial offer in December. At the time, the bid was a 30% premium to the day’s closing price. The offer price will remain at R120 a share that values the company at $1.25-billion, said Sfeir.

Barloworld’s shares traded 0.1% lower at R97.95 by 10:31 in Johannesburg on Monday. They’ve declined about 7.5% since Zahid’s offer was rejected on February 28

Discussions with Barloworld’s biggest shareholder, the Public Investment Corporation (PIC), will also include options to further invest in Black-ownership requirements, said Sfeir.

Africa’s top fund manager, which oversees R3-trillion ($162-billion) of assets, including about 22% of Barloworld, had rejected the takeover offer and preferred transactions that were more inclusive.

“The benefit of empowerment or any transactions should cover a wide range of stakeholders,” it said at the time.

The PIC and Silchester International Investors, which also rejected the initial offer, previously raised concerns about Sewela being part of the company during negotiations, citing a conflict of interest.

Zahid is comfortable with Sewela running the business while an independent board and steering committee handles the transaction, Sfeir said.

“The CEO forms part of our localization efforts, which is aligned with Caterpillar’s strategy, and he has a track-record of performance,” he said. 

“As long-term shareholders ourselves, we wanted the CEO to be able to continue to take care of operations and manage the business during a critical time like this.”

Silchester had rejected the offer, seeking as much as R130 a share.