Unlisted South African retailer Shoprite on Wednesday announced that Brait, acting through Maxshell 107 Investments, has increased the offer to Shoprite minority shareholders to R28 per share.
In terms of the revised offer, Shoprite shareholders will receive one New Retail Class B share valued at R28 for every Shoprite share held. When the offer to buyout Shoprite minorities was first announced in November, New Retail Class B shares were valued at R26.
Shoprite shareholders can now opt for a cash distribution of R27,99 per New Retail Class B share, up from R25,99. In the event that a dividend is declared by the Shoprite board for the period to December 31, such dividend will be paid to shareholders without affecting he amount of the New Retail capital reduction payment.
As a result, Rand Merchant Bank, which is underpinning the offer, has increased the purchase consideration under its offer to R27,40 per Shoprite ordinary share.
Maxshell has also proposed a mechanism to allow Shoprite shareholders to retain exposure to New Retail via a listed instrument (Listco) and is currently in initial discussions with the JSE to ascertain whether the instrument can be listed.
It was also announced that Brait had obtained a further irrevocable undertaking from fund managers Allan Gray to vote in favour of the transaction and to advise its clients to vote in favour of the transaction.
As at November 24, clients that had appointed Allan Gray as their portfolio manager held 26,5% of ordinary shares, net of treasury shares in Shoprite.
The private equity deal to buyout Shoprite has been criticised by investors, who have argued that chairperson Christo Wiese’s decision to use his voting shares, which hold no economic value, would deprive ordinary shareholders of a say in the group’s future. The original offer was seen to undervalue the group. – I-Net Bridge