Steinhoff to launch offshoot

STEINHOFF Africa Retail Limited (Star), a wholly-owned subsidiary of Steinhoff, said it planned to list issued ordinary share capital on the main board of the JSE before the end of September.

The company, which was established in July following the restructuring of Steinhoff’s African retail assets, said the listing would be subject to market conditions and approval by the JSE.

The listing will allow Steinhoff to issue shares to help fund the move for Shoprite.

The two retail giants called off merger talks in February after the major shareholders of Steinhoff, PIC and Titan failed to agree on the ratio that would have been involved in the exchange of shares into Steinhoff.

Damon Buss, an equity analyst at Electus Fund Managers, said the proposed deal would see Steinhoff getting a 22.7 percent stake in Shoprite, but not majority voting rights.

“This will give Christo Wiese 50 percent of voting rights in Shoprite. We think this is a first step by Wiese in an effort to get a full takeover of Shoprite in the long term,” Buss said.

Steinhoff said it would continue to be a controlling shareholder in the company and that Star would leverage off its strategic expertise, centralised sourcing, and manufacturing and logistics expertise in order to maximise operating efficiencies across its retail operations following the listing.

“The Star group has secured options which, once exercised, will result in Star acquiring a strategic investment in Shoprite, one of Africa’s leading food and grocery retailers with a track record of successful growth and expansion in South Africa and across the continent,” Steinhoff said.

Star would operate as a low-cost retailer with more than 4 800 stores in sub-Saharan Africa across various stable and growing sectors, including apparel, footwear, household goods, furniture, consumer electronics, appliances, general merchandise and building materials. It will also provide financial and mobile services.