Foschini: Offer to acquire RCS unit

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Foschinis Independent Newspapers A Foschini store in the Golden Acre, Cape Town. Photo: Sam Clark.

Johannesburg - South African retailer Foschini Group said on Friday it had received an unsolicited offer for its majority stake in a consumer finance joint venture it has with Standard Bank.

Foschini, a $2.2 billion retailer of clothing, jewellery and furniture, said in a regulatory statement a potential bidder had expressed interest in acquiring all of the unit called RCS.

Foschini owns 55 percent of RCS, while Standard Bank, Africa's largest lender, holds the remaining 45 percent.

Foschini did not give any details about the bidder or the bid.

Foschini had said in June it was looking to reduce its stake in the unit to below 50 percent, either through a separate listing or a sale.

A spokesman for Standard Bank said: “We became aware today of an unsolicited expression of interest in RCS. We have seen no details.”

RCS employees more than 850 people and provides consumer loans, insurance and store credit cards.

Standard Bank and its rivals have ramped up lending to consumers over the past year, to offset weak credit demand from companies.

Barclays Africa Group, formerly called Absa Group, last year paid $1.2 billion for the store credit card business of unlisted retailer Edcon, to increase its presence in the high-margin consumer lending market.

But banks in Africa's largest economy have also been hit with higher bad debts as consumers struggle to pay back loans.

Standard Bank on Thursday posted an 11 percent rise in first-half earnings, although bad debt charges soared by 28 percent.

Shares of Foschini Group climbed 3.5 percent to 100.80 rand, while Standard Bank was up 0.7 percent at 114.70 rand at 16:47 SA time. - Reuters

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