South Africa's Imperial Logistics has been particularly buoyant on the Johannesburg Stock Exchange where it is listed, increasing by 34.5% on July 8. The reason is the announcement of an $890 million offer by DP World, the Dubai-based port management company, to buy the entire company, which specializes in logistics and air freight.

The Emirati offer is 40% higher than Imperial's market value at the start of trading today on the Johannesburg Stock Exchange. Welcoming his company’s strategy, Sultan Ahmed Bin Sulayem (pictured), CEO of DP World, said: "the acquisition of Imperial will help DP World to build better and more efficient supply chains for the owners of cargo, especially in Africa. Imperial’s operations are complementary to our network of ports, terminals, and logistics operations on the continent. Like DP World, Imperial’s biggest asset is its people, and we look forward to welcoming employees of Imperial into the DP World team on the successful conclusion of the transaction."

Ahmed Bin Sulayem says Imperial is a leader in Africa where trade is expected to grow at more than twice the GDP due to population growth, accelerated urbanization, and the rise of the middle class.  If the transaction is carried through to its completion announced before the end of the year, it will allow DP World to strengthen its presence in 25 countries in Africa and Europe.

Imperial Logistics' shareholders are not expected to reject the offer. The company's performance over the last three years has been sluggish. The debt-to-equity ratio has remained above 150%, despite a 19.5% increase in revenues in 2020. Under these conditions, the current dividend yield is around 3.5%. DP World's offer should be a relief for this company, which has more than 70% free float.