The Story broke earlier today about the likelihood of Shoprite Supermarket chain selling off majority of its shares.
The retail store made the announcement during a trading update at the Johannesburg Stock Exchange (JSE). The update states that it had kick-started the process of letting off the majority of its shares.
Excerpts of the report:
Following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria, the board has decided to initiate a formal process to consider the potential sale of all or a majority stake in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited. As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its result for the year.
Three strong contenders are currently engaged in high-wired corporate politicking to grab the majority stake. Among them is Persianas Nigeria Limited, A real estate development company owned by Nigeria’s Tayo Amusan who appears to be the most favoured.
The other 2 contenders are also real estate development owners with foreign links. One of them is backed by the South African Pension Fund.
Amusan sits aboard several large companies in Nigeria, including Resourcery Limited and African Paints.
His company, Persianas was founded in 1990 followed by The Palms Sopping Mall in Lekki, Lagos. The succcess of The Palms informed Amusans decision to open three other malls in Ota, Ibadan, Enugu and Kwara.
Shoprite’s exit plans involve retaining the management of its brand name, chain of operations, trade marks and supply chain.
Carl Erickson, General Manager of the Shoprite Retail chain told employees that the revised business model is to make it “truly Nigerian.”
Part of his memo reads:
“The expansion of the retail business in Nigeria to a greater consumer market should remain everybody’s shared vision.
“It has, however, become apparent that the best manner in which to do this is by engaging Nigerians for the Nigerian Market.”
This online News platform reported earlier today that there was a sharp drop of 6.3% sales in Shoprite’s 2020 fiscal year.
Shoprite made its foray into the Nigerian Market in December 2005 starting with The Palms Shopping Mall. It currently has over 25 stores across the country.