GTB 737 banner Yudala banner

Shoprite forced to repurchase shares from former CEO

By News Express on 08/05/2017

Share on facebook Yahoo mail icon Gmail icon

Views: 384

•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


 

CLASSIFIED ADS

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

 

You may also like...
Senate passes Railway Bill

Popoola’s eventful 4 months as Vice-Chancellor of UNIOSUN,...

NiMET forecasts sunny weather in the North today,...

Nigeria's foreign reserves drop by $257m in two...

Massive oil spill pollutes Bayelsa waterways, farms and...

NiMet forecasts rains today over Calabar, Port Harcourt,...

Judge stalls proceedings in application seeking permanent forfeiture...

Breaking News: Oshiomhole declared winner of Edo governorship...

Nigerian elected Vice-President of world Catholic body

Abia Political Crisis: INEC lied, they were served...

Cross River boils over UN’s plan to cede...

FG investing heavily in social programmes to create...

 

Latest News Nigerian Army launches books on critical thinking 82 Boko Haram fighters die in battle •No LGA under terrorists’ control — Army South African policemen rob Nigerian man of $61,000 Notorious Lagos cultist re-arraigned Arms factory discovered in Abuja, suspects nabbed Send your wards to Nigerian schools, JAMB tells political elite Ghost worker on trial over N11m fraud Borno APC Coalition rejects Modu Sheriff Manufacturers want 7-year tax break West and Central African youth endorse campaign for greater participation in the political process Aiteo shuts Nembe creek trunk line over leakage Buhari’s aide hails Liberia’s willingness to implement beneficial ownership transparency

 

Most Read Nigerian female sex addict opens up, says ‘I like it with both men and women’ (278,799 views) NUDE PHOTO OF OMOTOLA JALADE-EKEINDE surfaces online (260,755 views) Shameless Genevieve Nnaji exposes breasts in public (211,680 views) Finally named: The full list of friends of Nigerian female sex addict who prowled Facebook (177,826 views) Igbo scholar disgraces Femi Fani-Kayode •Demolishes claims on Igbo/Yoruba history with facts and figures (176,803 views) OLUMBA OLUMBA OBU (the one who called himself God) IS DEAD (158,507 views) Breaking News: POPULAR REVEREND CONVERTS TO ISLAM in Kaduna (Nigeria) (136,785 views) THE FINAL DISGRACE: Igbo scholar unleashes more facts about Igbo/Yoruba history, finishes off Femi Fani-Kayode with second article (126,813 views) OBJ’s son reported dead in Lagos plane crash •Names of more victims emerge (120,404 views) Lagos plane crash: Journalist releases victims’ names (111,264 views) Gunmen kill ASP, 2 other police officers in vain bid to kidnap Rivers PDP chieftain (110,442 views) APC cries foul as PDP’s Fayose takes early lead in Ekiti governorship election (102,806 views)

 

Categories Advertorials (3) African Press Organisation (81) Art & Literature (28) Business (2,695) Business Verdict (22) Columnists (744) Complaints & Requests (93) Enterprise & Opportunities (178) Entertainment (378) Features (489) Global Business Monitor (178) International (1,544) Interviews (130) Live Commentary (28) Love Matters (73) News (28,609) Opinion (809) Pidgin (8) Politics (3,939) Religion (627) Sports (1,323) Stock Watch (23) AMA & Al Jazeera Global Update

 

UBA mobile app

CBN words on marble advert

 

 

Manchester United vs Everton 4-0 All Goals & Extended Highlights

 

APO Newsbreak logo

 

CLASSIFIED ADS

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

GOCOP Accredited Member

GOCOP Accredited member

 

 

Africa Media Agency and Al Jazeera

Advertisement



 

 

CLASSIFIED ADS

Let us build the most comprehensive online database of worthy and credible Nigerians from all walks of life. It is worth doing!

Loss Off Your Belly Fats, Upper Arm Fat and Body Fats In 2weeks Time.. Click HERE To Start Now!