Shoprite Showdown at the OK Corral
Something of an imbroglio – is that a word? – over at Shoprite, where The Big Red One is struggling to get minority shareholders to embrace the idea of a R1.7bn payout to one Mr James W. “Whitey” Basson, latterly the CEO. Mr J.W., you see, has an agreement that when it came time for him to offload his Shoprite shares, Shoprite itself would snaffle them all up, lock stock and barrel, at the asking price on the day. Shoprite have beaten him down on this – from R211 per share to R201, and RMB, canvassed for an opinion, has declared the payment fair to shareholders. Shoprite have also promised the establishment of an R84m fund to educate the previously disadvantaged, presumably as a sweetener to shareholders like the Public Investment Corporation (PIC), who might otherwise have stymied Whitey’s bonsela. However, the re-purchase requires 75% shareholder approval, and given that only a few at the top actually knew about the deal in the first place, this majority is far from guaranteed.
Comment: It is going to be fascinating to see how this one plays out. Whitey Basson is not generally the one who blinks first.