NewsExpress advert FCMB banner Fidelity bank banner NewsExpress advert
Shoprite forced to repurchase shares from former CEO

By News Express on 08/05/2017

Share on facebook Yahoo mail icon Gmail icon Share on Google+

Views: 809

•Former Shoprite CEO Whitey Basson.
•Former Shoprite CEO Whitey Basson.

In an unprecedented move, Shoprite/Checkers is being forced to repurchase R1.8bn worth of shares from former CEO Whitey Basson. The move, which will add about R144m to Shoprite’s annual interest bill, has been slammed as a misalignment of interests between a company and one of its former top executives.

On Friday, Shoprite told shareholders that in terms of a 2003 employment agreement with Basson, the company was obliged to repurchase any shares sold to them by Basson, while he was still in its employ.

The agreement obliged Shoprite to repurchase the shares at the middle market price on the date Basson exercised his put option.

That date was May 2 and the price for each of the 8.7-million Shoprite shares Basson sold was R211. This is the highest level at which the share has traded in five years. It did not remain at this level for long. On Friday the share price ended at R203, which means Basson is already showing a R60m profit on the timing of the transaction.

Basson retired as Shoprite CEO at the end of December after 37 years at the helm, but remained on the board as nonexecutive vice-chairman.

Analysts expressed surprise at the 2003 agreement, saying they had not heard of it but acknowledged it could have been tucked away in the small print of the reams of information listed companies are required to publish. The company has not responded to a request for details about the disclosure.

It said the 8.7-million shares did not represent Basson’s entire shareholding. Shoprite’s most recent annual report shows that at end-June 2016 Basson had 9.1-million shares.

Shareholders will vote on the repurchase, which is expected to increase the group’s interest charges by about R144m a year.

Under JSE rules, Shoprite is obliged to obtain a fairness opinion on the repurchase because the deal is with a related party and is at a price which is a premium to the weighted average traded price over the 30 business days before the date when Basson exercised his option.

The company said the repurchase price represented a 5.3% premium.

Jean Pierre Verster of Fair Tree Capital said the repurchase was “strange” and it created an uncomfortable conflict of interest between the executive and the company. “R211 isn’t extremely expensive, but it is close to full value so it’s in [Basson’s] interest to sell, but it’s not necessarily in Shoprite’s interest to buy,” Verster said, alluding to the fiduciary duties of directors. Basson’s contribution to Shoprite was not at issue, he said.

The sale of the bulk of his shares in one deal may create the impression that Basson now believes Shoprite has stopped growing.

•Credit (except headline): Business Day SA.


Source News Express

Posted 08/05/2017 9:37:43 PM


Share on facebook Yahoo mail icon Gmail icon Share on Google+



REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...


You may also like...
Popular Nigerian doctor in coma after crash in...

FG appoints Chief Trade Negotiator

Our Governor has gone ‘mad’ again?

Corruption trial: Prosecution confronts senior advocate with damning...

Restructuring as disintegration

Ship owners beg NIMASA for national carrier status...

2015 NESD in Imo State: Call for Healthy...

Dangote set to launch Nigeria’s first private refinery...

U-20 Women's World Cup: Falconets land in France...

PDP protests arrest of Edo Chairman, harassment of...

Why Buhari may remain dead to Nigerians

Al-Makura seeks re-election as Nasarawa Gov, unfold second...


Latest News 8,000 whistle blowers partner FG in war against corruption Ex-militants threaten to resume hostilities 2019: APC governors adopt Buhari as consensus candidate Melaye vs Police: Embattled Senator’s spokesman clears the air Dutch cargo ship hijacked off coast of Nigeria, seize 12 crewmembers BREAKING: Senate adjourns over Melaye, summons IGP Ibrahim Idris Daniel woos Afenifere, says Atiku’s Presidency will support restructuring of Nigeria Oshiomhole’s endorsement as APC National Chairman as childish: Odigie-Oyegun Cable TV front desk officer slammed with 22-count charge for N14m fraud, remanded in prison custody NPA bans return of empty containers to seaports Dino Melaye’s arrest ‘a sad reminder of Hitler’s Gestapo strategies’ — Ozekhome Kano Govt. owes retirees N13bn gratuities


Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (339,876 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (334,917 views) Shameless Genevieve Nnaji exposes breasts in public (267,968 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (220,360 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (202,198 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (198,270 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (172,969 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (155,335 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (147,202 views) My wasted years in Olumba Olumba Obu’s Evil Brotherhood (139,139 views) Lagos plane crash: Journalist releases victims’ names (136,991 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (129,661 views)


Categories Advertorials (3) African Press Organisation (81) Art & Literature (36) Business & Economy (3,074) Business Verdict (40) Columnists (837) Complaints & Requests (94) Enterprise & Opportunities (207) Entertainment (484) Features (569) Global Business Monitor (264) International (1,928) Interview (149) Live Commentary (28) Love Matters (116) News (34,742) Opinion (917) Pidgin (10) Politics (4,813) Religion (724) Sports (1,485) Stock Watch (28) AMA & Al Jazeera Global Update


Firstmobile banner




Boko Haram commanders surrender


APO Group Partner




REVEALED: 3 natural ways to get stronger erections, last 25minutes on bed, and increase manhood size without using drugs. Also, Natural Prostrate Enlargement Remedy.. Get In HERE...

GOCOP Accredited Member

GOCOP Accredited member



Africa Media Agency and Al Jazeera