Total Produce has sold its 50 per cent stake in Capespan Europe for €8.5 million in cash and an additional 20 million shares in Capespan South Africa.
The deal increases Total Produce’s stake in Capespan South Africa to 25 per cent and makes it the second-largest shareholder in the business.
In a statement, Total Produce said the full merger of Capespan Europe with Capespan South Africa "will result in the alignment of the offering to provide the best possible service to our customers".
Carl McCann, chairman of Total Produce said: "We are pleased to have further increased our shareholding in Capespan, the premier South African Produce company with a global reach."
The transaction is subject to regulatory approval, and the issue of the shares is subject to the approval of Capespan South Africa's shareholders.
It follows Capespan’s advice to shareholders in early December that it has entered into negotiations that, if successfully concluded, may have a material effect on the price of the company’s securities.
The statement said: “Shareholders are advised to exercise caution when dealing in the company’s securities until a further announcement is made.”
At the same time Capespan International Ltd also reported an improved performance for the year to 2 January 2011 in results filed at Companies House.
The company posted a £1.19m loss after tax for the year, but that represented a considerable improvement on the £4.5m loss the previous year.
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