Sho­prite down, Stein­hoff up on bid of­fer

The Star Early Edition - - COMPANIES & NEWS - Sandile Mchunu

SHO­PRITE shares fell nearly 5 per­cent on the JSE yes­ter­day af­ter Stein­hoff In­ter­na­tional re­newed its takeover bid for Africa’s big­gest food re­tail chain.

The shares dropped to R197.55 on the JSE in the af­ter­noon be­fore mak­ing a late re­cov­ery to close 4.27 per­cent lower at R200.10 by the end of trade.

Stein­hoff’s on the other hand went in an op­po­site di­rec­tion – gain­ing 1.77 per­cent to close at R70.05.

On Fri­day, the com­pany said that it had es­tab­lished a sin­gle hold­ing com­pany, Stein­hoff Africa Re­tail (Star), and would list it on the JSE.

The com­pany also said it had en­tered into call op­tion agree­ments with Ti­tan Premier In­vest­ments – a com­pany ul­ti­mately con­trolled by a Wiese fam­ily trust – as well as the Pub­lic In­vest­ment Cor­po­ra­tion (PIC) and Lan­caster Group un­der which Star could ac­quire eco­nomic and vot­ing in­ter­ests in Sho­prite.

If suc­cess­ful the move will see Stein­hoff ac­quir­ing a ma­jor­ity stake in Sho­prite for R35.5 bil­lion.

The re­newed bid comes af­ter the two com­pa­nies called off the 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.

Stein­hoff has be­come a ma­jor player in the in­ter­na­tional re­tail mar­ket with the ac­qui­si­tion of Pound­land in Bri­tain, Fan­tas­tic Hold­ings in Aus­tralia and US-based Mat­tress Firm.

The Sho­prite deal would see Stein­hoff ex­pand­ing be­yond South Africa into fast grow­ing con­sumer mar­kets like Nige­ria, Zam­bia and An­gola.

In­dus­try an­a­lysts yes­ter­day said the merger would not add much value as the com­pa­nies op­er­ated in dif­fer­ent sec­tors, with Stein­hoff spe­cial­is­ing in fur­ni­ture while Sho­prite was rooted in food re­tail.

Elec­tus Fund Man­agers eq­uity an­a­lyst Da­mon Buss said the pro­posed deal would see Stein­hoff ac­quir­ing 22.7 per­cent of the is­sued shares in Sho­prite and through a call op­tion agree­ment.

Buss said the PIC and Ti­tan would in turn ac­quire 50 per­cent of the vot­ing rights.

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