Wiese offloads Shoprite stake worth R1bn

Billionaire Dr Christo Wiese, the second-largest shareholder in Shoprite Holdings, has disposed of 3.8 million shares in the retailer in a transaction valued at R939 million.

The shares were sold by Titan Fincap, a subsidiary of Wiese-owned vehicle Titan Premier Investments.

The trade was done on Tuesday at a price of R245 per share. That such a large block of shares traded at a single amount (not an average price, as is often disclosed in these sorts of transactions) suggests that there was a single buyer, likely an asset manager, on the other side of the transaction.

The 3 831 164 shares represent a stake of 0.65% in the country’s largest supermarket group.

The price achieved per share of R245 is 28% higher than the 52-week low of the stock (R191.65), reached in May and 8% lower than the high of R266.59 from August.

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Christo Wiese: Shoprite grants cash-settled share-based payments

Wiese, 82, retains 59.279 million shares in Shoprite, which equates to a holding of 10.02%.

The Government Employees’ Pension Fund (GEPF) through the Public Investment Corporation (PIC) is the largest shareholder in the group with a 15.54% stake.

In the 2004 financial year, Shoprite granted cash-settled share-based payments to Wiese via a management company. The rights to these payments entitled him to receive cash payments based on “the difference between the share price at the date of the exercise of the rights and the strike price which relates to the share price at the date of the grant”.

Wiese exercised his rights to cash-settled share-based payments based on one million shares in early December 2021 at a market price of R202.04 per share. The total intrinsic value at the exercise date amounted to R196 million.

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Control

He also holds 305.6 million non-convertible, non-participating, no par value deferred shares in the group. This holding, via Thibault Square Financial Services, has allowed Wiese to wield control of the group.

The deferred shares have 32.3% of Shoprite’s voting rights.

The group in 2019 attempted to purchase these shares in a deal worth R3.3 billion, in order “to address the risk that the Chairperson’s interest in Thibault Square may be passed on through succession or disposal to a party who may not be aligned with the Group’s long-term strategy and direction”.

It proposed issuing 20 million ordinary shares in exchange for the deferred shares.

The group eventually “cancelled the transaction after more than 15% of ordinary shareholders indicated in writing that they did not support the proposed transaction in its current form and would vote against it”.

This article is republished from Moneyweb under a Creative Commons licence. Read the original article.