Steinhoff-Shoprite merger talks collapse

Photo_Web_Shoprite_061113

Funds can gain indirect exposure to the rest of the continent by investing in FTSE/JSE-listed companies such as Shoprite which earns 12 percent of its earnings from its rest-of-Africa operations.

Funds can gain indirect exposure to the rest of the continent by investing in FTSE/JSE-listed companies such as Shoprite which earns 12 percent of its earnings from its rest-of-Africa operations.

JOHANNESBURG - South African retail group Steinhoff International on Monday terminated negotiations to merge with supermarket giant Shoprite after an agreement could not be reached on the exchange ratio that would apply to the share exchange.

This comes after Steinhoff in December proposed a deal in which it would sell its Africa assets, mainly South African, to Shoprite in exchange for shares in a bid to create Africa’s biggest retailer worth an estimated R180 billion.

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This meant there was a possible exchange by the largest shareholders of the companies, the Public Investment Corporation (PIC) and Titan Premier Investments, of their Shoprite shares for Steinhoff shares at an “to be agreed” ratio, the share exchange.

Titan is the investment company in which retail mogul and Steinhoff chairman, Christo Wiese, holds shares in the grocery and furniture groups.

“Shareholders of the companies are hereby informed that the companies have decided to terminate their negotiations related to the Proposed Transaction as the PIC, Titan and Steinhoff could not reach agreement on the exchange ratio that would apply to the share exchange,” Steinhoff said.

“The Proposed Transaction was investigated and analysed by the respective management teams of Steinhoff and Shoprite, and although the proposed transaction presents exciting opportunities for the companies and their respective management teams, the fact that the relevant parties could not reach an agreement in respect of the Share Exchange resulted in the negotiations being terminated.”

Shoprite’s stocks were up seven percent following the announcement, while Steinhoff’s jumped by six percent.

READ: Steinhoff, Shoprite to merge African operations