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Steinhoff and Shoprite withdraw plans to merge

Steinhoff international logo 725 x 500

South African retail groups Steinhoff and Shoprite have withdrawn plans to merge and create a new company. 

The resulting business was to be called Retail Africa and would have reportedly seen annual sales of ZAR200bn.

The two companies claimed that they could not agree on the share exchange ratio, although Reuters reported that some of Shoprite's shareholders had complained that the deal was 'short on details' and would have seen the exchange of 'a superior stock with that of an inferior stock'.   

The deal was initiated in December 2016, when Shoprite put forward a deal to acquire the African assets of Steinhoff.

The two companies released the following statement in relation to the cancellation of the merger:

"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.

"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.

"Accordingly, shareholders of Steinhoff and Shoprite are advised that caution is no longer required to be exercised by shareholders when dealing in their Steinhoff and/or Shoprite securities."

Source : Insight DIY

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23 February 2017

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