Stein­hoff bags Pep­kor for R63bn

The Star Early Edition - - BUSINESS REPORT - Nom­pumelelo Mag­waza

STEIN­HOFF’S snatch­ing of Pep­kor group in a R62.8 bil­lion deal was yes­ter­day de­scribed as any­thing be­tween a fairy­tale, per­fect fit and common sense by the Stein­hoff chief ex­ec­u­tive, Markus Jooste, but the most apt was that it would put both the com­pa­nies in the top ten re­tail­ers in the world.

Jooste said Stein­hoff ’s decision to ac­quire 92.34 per­cent of Pep­kor Group was not easy but made sense as the group looked at grow­ing in­ter­na­tional dis­count seg­ment.

“Here are again th­ese two com­pa­nies both built from South Africa, man­aged from here and driven from here that can now play in the top 10 re­tail­ers in the world,” said Jooste. “It is a fairy­tale story.”

Asked where the deal put South Africa business ca­pa­bil­i­ties in the global pic­ture, Jooste said he had per­son­ally al­ways been proud of SABMiller for be­com­ing lead­ers in its field from a South African base.

Stein­hoff in­tends ac­quir­ing Ti­tan Premier In­vest­ments’ ef­fec­tive eq­uity in­ter­est in Pep­kor of 52.4 per­cent, 37.06 per­cent from Brait and 2.81 per­cent from Pep­kor man­age­ment. Brait will sell its stake for R26.4bn which will be set­tled in cash and shares.

Busi­ness­man Christo Wiese is the ul­ti­mate con­trol­ling share­holder of Ti­tan.

Should the deal pro­ceed, the Wiese fam­ily will now own about 20 per­cent of Stein­hoff, Brait will own about 6 per­cent and Jooste fam­ily 65 mil­lion shares in the company.

Wiese was be­lieved to be also ey­ing some of El­ler­ines stores be­long­ing to African Bank In­vest­ment Limited.

The deal will also give some weight to Stein­hoff Euro­pean op­er­a­tions ahead of its list­ing on the Frankfurt Stock Ex­change in the sec­ond quar­ter of next year.

The trans­ac­tion val­ues Pep­kor at R68bn. Founded in 1965,

It would also en­hance our po­si­tion­ing in terms of size and wait­ing in the ducks in Frankfurt…

the group owns more than 6 000 stores glob­ally with sales of more than R155bn.

“This trans­ac­tion in­creases the company’s mar­ket cap­i­tal­i­sa­tion sub­stan­tially be­cause of the huge in­crease in cap­i­tal this deal brings about. It would also en­hance our po­si­tion­ing in terms of size and wait­ing in the ducks in Frankfurt which is a pos­i­tive,” he said.

Pep­kor and Stein­hoff also shared a vi­sion to be the world player in the dis­count mar­ket.

Stein­hoff is very strong in the fur­ni­ture and house­hold goods sides while Pep­kor is strong on ap­parel and house­hold goods.

Jean Pierre Ver­ster, an eq­uity an­a­lyst at 36ONE As­set Man­age­ment, said through this deal both Pep­kor and Stein­hoff would ben­e­fit from com­bined sourc­ing of prod­ucts from south-east Asia and east­ern Europe. He added that both com­pa­nies had op­er­a­tions not only in South Africa but also in Poland and other east­ern Euro­pean coun­tries.

Stein­hoff ’s shares gained 4.5 per­cent to R58.49.

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