Steinhoff Africa makes an overture to Remgro
Steinhoff Africa Retail (Star), which is seeking to distance itself from its scandal-hit parent, Steinhoff International, has met with Johann Rupert’s Remgro to sound it out as a potential investor.
The executive committee of Star, which last week said it was planning to change its name back to the original Pepkor, instigated the meeting, according to people familiar with the matter.
An international bank, which had exposure to Steinhoff and might benefit from seeing a large chunk of Steinhoff’s holding in Star being sold, helped arrange the meeting, the people said.
Remgro declined to comment and Star said that it had met “many investors as part of normal investor relations” and that the “nature of these discussions do not necessitate publication of cautionary announcements”.
News of the meeting will come as a surprise to many in the investment community, given the animosity between Christo Wiese, whose family founded and owned Pepkor
until its acquisition by Steinhoff in 2015, and Rupert.
The announcement of accounting irregularities at Steinhoff in December 2017 led to a more than 90% slump in the share price, wiping out hundreds of millions of rand from the net worth of executives and employees in associated companies.
Star said last week it would spend R500m bailing out executives who faced liabilities linked to the parent company’s share price.
Workers were not spared, with the value of shares held by the Government Employees Pension Fund dropping more than R20bn from the end of November to late January.
The meeting with Remgro was described as being “preliminary” by those with knowledge of it.
It involved members of Star’s executive committee describing plans for each division over the medium term.
No senior executives from Remgro were present and no nonpublic financial information was exchanged, which probably explains why no cautionary announcement was issued by either company.
The sources said it was highly unlikely that the engagements would go any further.
STAR SAID LAST WEEK IT WOULD SPEND R500M BAILING OUT EXECUTIVES