SHARE PRICES DROP
Steinhoff-Shoprite deal no easy sell
Renewed cautionary suggests Christo Wiese is having difficulty persuading the main minority shareholders of the benefits
Minority shareholders in Steinhoff and Shoprite remain unconvinced of the benefits of a proposed merger between the companies. The share prices of both are still trading below the levels at which they were in early December before the deal was flagged. Tuesday’s announcement renewing the joint cautionary issued seven weeks ago provides no additional details and suggests that Christo Wiese, the controlling shareholder in both entities, is having difficulty persuading the main minority shareholders of the benefits. "From the start there have been concerns about the pricing of this transaction but there are a number of ways of dealing with those concerns, such as creating equity instruments that are more palatable to minorities," said analyst Syd Vianello. It was important that Wiese got the support of the fund managers, he said. If Wiese wanted to keep the fund managers onside he might not want to push the prickly issue of his vote in the transaction. There is growing speculation the ...
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