Market sells on tie-up news as Shoprite takes bigger hit
The deal is to be priced slightly in favour of Steinhoff, share prices suggest
In the four weeks since the announcement of a proposed tie-up between Steinhoff and Shoprite, the share price movements suggest investors believe the deal will be priced in Steinhoff’s favour, but only just. Within hours of the announcement on December 14, the Shoprite share price slumped from a high of R193 to R174 and since then has trended weaker to about R169. Steinhoff’s share also took a hit on the announcement, dropping from R76 to R68 within hours and still trades near that lower level. Shoprite’s 12.5% drop compares with Steinhoff’s 10%. Shoprite’s weakness came at the end of a year in which the share enjoyed a strong run. Steinhoff has been trading weaker since August 2016.
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