Shoprite, Africa’s largest food
retailer, announced on Monday it is considering selling off its majority share
in its Nigerian subsidiary.
In a trading update filed at the
Johannesburg Stock Exchange (JSE), the retail giant said it has begun the
formal process of liquidating its majority share.
“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 results for the year,’’ it
said.
TheCable reports there is a
corporate tussle among three entities to bite into the larger stake of the
retailer.
Persianas Nigeria Limited, a
property development company, owned by Tayo Amusan, is said to be the preferred
bidder for the Shoprite stake.
Amusan is a businessman invested
in property development. Some of his properties house the stores of Shoprite.
Amusan founded Persianas in 1990.
In 2004, he launched, The Palms. Owing to the success of The Palms in Lagos, he
floated three additional malls in Enugu, Kwara, Ota and Ibadan.
Amusan sits on the board of
several Nigerian companies, including African Paints Nigeria Limited, and he is
also the chairman of Resourcery Limited.
The two other contenders are said
to be another property development company but with links to a foreign country,
and a South African company backed by South Africa’s pension fund. Though
Amusan is mooted to be the favoured investor, the other bidders are pushing
negotiations hard.
TheCable also reports that the deal
will involve Shoprite retaining the management of its chain of operations,
brand name, trademarks, and supply chain.
In an internal memo of July 31, Carl Erickson, general manager of the retailer, informed
employees that the revision in the business is to make the company ‘’truly
Nigerian’’.
The memo read: “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 Nigerian investors who share in this
vision. In so doing we will be creating a truly Nigerian business run and owned
by Nigerians for the Nigerian market.”
Shoprite posted a sharp decline
in sales of 6.3 percent in the 2020 fiscal year.
The retailer launched in Nigeria
nearly 15 years ago, opening its first store in Lagos in December 2005.
That chain has grown from one to
more than 25 retail stores across Nigeria — including some of the biggest
retail stores in west Africa.
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