Cape Town — Massmart has received written notice from US firm Wal-Mart of its firm intention to make an all cash offer to acquire a 51 percent stake in the SA retailer.
The board said on recently it was “unanimous” in support of the proposed deal, which would see Wal-Mart pay R148 per ordinary share, but it still needed the support of a two-thirds majority of shareholders and the South African authorities.
“The Massmart board has considered the terms of the offer and the opinion of [bankers] Morgan Stanley, the independent advisor and is unanimous in its support for the proposed transaction. The total transaction is valued at approximately R17 billion for 51 percent of Massmart,” the retailer said in a statement.
It said offers on comparable terms were being extended to the beneficiaries of the employee share trust, the Thuthukani trust and the black scarce skills trust.
“These offers will be inter-conditional with the offer to ordinary shareholders.”
The board said the offer from Wal-Mart followed a rigorous due diligence process.
“There are still a number of important conditions that need to be fulfilled before the transaction can be implemented. These include amongst others two thirds majority shareholder support (75 percent) and approval from the South African competition authorities.”
Massmart CEO Grant Pattison said the offer was a sign of confidence in the local economy and could create new jobs.
“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.
Source: sapa.co.za/ Image: Jared C. Benedict