Shoprite Share Purchase From Ex-CEO Hands Steinhoff ControlBy and
Steinhoff Africa’s voting rights in Shoprite edge above 50%
Billionaire Christo Wiese has sought to combine the companies
Shoprite Holdings Ltd. investors’ vote to buy 1.75 billion rand ($135 million) worth of shares from former Chief Executive Officer Whitey Basson allows Steinhoff International Holdings NV’s Africa unit to take control of the continent’s biggest food retailer.
Shareholder approval for the purchase of 8.68 million shares from Basson increases the voting rights of Steinhoff Africa Retail Ltd. to 50.61 percent from 49.85 percent, according to the Steinhoff unit’s pre-listing statement. That gives Christo Wiese, the billionaire chairman and largest shareholder in both Shoprite and fellow retailer Steinhoff, a way of combining his African interests.
Shoprite’s other investors “are not affected at all,” Wiese, 75, said after shareholders voted to buy Basson’s shares in Cape Town on Tuesday. “Today control rests essentially with my family group,” he said. “Steinhoff controls Steinhoff Africa Retail, which controls Shoprite.”
The billionaire, South Africa’s fourth-richest person with a net worth of $5.6 billion, first tried to combine the businesses late last year, when Shoprite and Steinhoff announced a proposed merger of their operations on the continent. After that plan collapsed, Steinhoff said it would spin off its Africa business and list it in Johannesburg. Last month, Steinhoff Africa Retail, known as Star, said it had agreed to buy a 23 percent stake in Shoprite that came with 49.85 percent voting rights.
“It’s Wiese that benefits here as he gets to consolidate his assets into one management structure,” Evan Walker, a money manager at 36ONE Asset Management Pty Ltd. in Johannesburg, said by phone. “It essentially means his assets are professionally managed by a single group.”
Steinhoff, owner of the Pep low-cost clothing chain in Africa, Conforama in France and The Mattress Firm in the U.S., has been expanding rapidly through acquisition since 2014. The company moved its primary listing to Frankfurt from Johannesburg in December 2015.
Shoprite shares fell 0.1 percent to 221.73 rand as of 4:14 p.m. in Johannesburg. Basson, who retired as CEO at the end of last year after almost four decades at the helm, will get 201.07 rand a share.
“For the minority Shoprite shareholder it takes away the premium option they may have got if there was ever to have been an offer from a foreign company,” said 36One’s Walker. “But Wiese essentially always had control and could have blocked any takeover.”