Whitey Basson stock buyback: who is going to gain?
The R174m profit would be made at Basson’s expense — a vote against the deal would be good news for him
Shoprite could make a profit of R174m on its proposed R1.7bn repurchase of shares from former CEO Whitey Basson, but corporate-governance specialists are encouraging shareholders to vote against the deal, which they say would be bad for the company. The profit would be made at Basson’s expense — a vote against the deal would be good news for him as he would then be free to sell his shares at a higher price on the open market. The repurchase agreement with Shoprite is pitched at R201 a share, which until a week ago looked attractive for Basson, but is now R20 below the ruling market price. Basson acquired the shares over the 37 years he was CEO, during which time he grew the company from a handful of outlets into the largest grocery retailer in Africa. On Wednesday, Proxy View, which advises shareholders on corporate governance matters, recommended that Shoprite shareholders vote against the repurchase. "This is an ill-advised transaction from so many perspectives that it’s difficult...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.