CONTRACT SMALL PRINT
Shoprite interest up as Whitey Basson sells stock
The unprecedented move will add about R144m to Shoprite’s annual interest bill
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 Sho...