Heavy speculations are rift as to the grand merger proposed by the phenomenal retail franchise company Shoprite and Steinoff consortium.
The business outfit Shoprite and Steinhoff announced on Monday that they will no longer pursue their proposed merger, as the parties involved could not reach agreement on the share exchange ratio.
Investors cheered the move, sending the share prices of Shoprite and Steinhoff up 6.1% to R183.57 and 7.11% to R71.55 respectively at 11:01 on the JSE.
The proposal was for Shoprite to buy Steinhoff’s African retail assets in exchange for an undisclosed yet significant equity stake.
This could have led to Steinhoff taking control of Shoprite via a buyout offer to minority shareholders.
The companies said in a joint statement that Steinhoff and its largest shareholders – the Public Investment Corporation and Titan Premier Investments – could not reach agreement on the exchange ratio that would apply to the share exchange.
Bringing Shoprite and Steinhoff together would have given the combined entity the scale to sell everything from potatoes to sofas and sneakers at discount prices to consumers on the continent, Bloomberg reported.
Some members of the public were however discomfited by the sudden announcement.