Grant Pattison, Massmart Chief Executive Officer. (Photo: Massmart)

Wal-Mart to acquire 51 pc of African retailer

SOUTH AFRICA
Thursday, December 02, 2010, 02:30 (GMT + 9)

Wal-Mart wants to make an all cash offer to acquire 51 per cent of Massmart at ZAR 148.00 (USD 20.75) per Massmart ordinary share, it told the Board of Directors of Massmart in a written notice. Offers on comparable terms are being extended to the beneficiaries of the Employee Share Trust, the Thuthukani Trust and the Black Scarce Skills Trust. 

US-based retailer Wal-Mart’s offer allows Massmart shareholders to realise a significant premium and keep further upside potential resulting from Wal-Mart ’s entry and Massmart’s continued listing on the JSE.

The Massmart Board has ruminated the terms of the offer and the advice of independent advisor Morgan Stanley, and unanimously supports Wal-Mart ’s proposal. The total transaction is valued at some ZAR 17 billion (USD 2.4 billion).

Wal-Mart’s offer came after a thorough and rigorous due diligence process was finalised. 

Some important conditions still must be fulfilled before the transaction can take place. These are majority (75 per cent) shareholder support and the approval from the South African Competition authorities, among others.

“This is a milestone in Massmart’s history and is a vote of confidence not only in Massmart and our employees, but also in the strong growth potential of South Africa and the continent,” stated Massmart CEO Grant Pattison. “If approved, the transaction promises to be very positive for the regional economy, facilitating job creation, providing new opportunities for small and medium businesses and improving competitiveness.

“In gaining access to Wal-Mart’s experience and capabilities, we expect to be able to offer consumers an even wider selection of products that are competitively priced and more consistently available, delivering an improved customer experience across all our stores,” he added.

The offer, subject to the fulfilment or waiver of the conditions precedent and as it applies to ordinary shareholders of Massmart, would be executed through a scheme between Massmart and the holders of qualifying Massmart ordinary shares.

Once the scheme is running, ordinary shareholders of Massmart will be deemed to have disposed of their scheme shares accounting for 51 per cent of their total shareholding. They will then keep the outstanding 49 per cent of their shareholding if they wish; the same dispensation is to be made to beneficiaries of the trusts.

“We are confident that the proposed transaction will enhance the Group’s prospects and growth, with obvious benefits to current and prospective stakeholders,” said Massmart Chairman and founder Mark Lamberti.

The offer documents will be mailed to Massmart’s shareholders by 9 December.

Further, the acquisition means that Wal-Mart will enter high growth markets like South Africa, Nigeria and Uganda. The chain is anticipated to enlarge its experience in connecting farmers with its global supply chain, which will increase farmer livelihoods and help them boost the quality of their produce, reports Daily Monitor.

By Natalia Real
[email protected]
www.seafood.media

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