Thibault and Titan belong to Wiese. The completion of the deal will result in Wiese having 17.8 percent voting rights of Shoprite, down from 42.3 percent, while his direct shareholding in Shoprite will increase to 17.8 percent, up from 14.8 percent.
As previously announced in February, Shoprite is set to buy back the deferred shares owned by Wiese through Thibault Financial Services, which carry about 32.3 percent of the voting rights of Shoprite.
Shoprite capital structure consists of two share classes: Shoprite Holdings ordinary shares and Shoprite Holdings deferred shares.
Last week, Shoprite announced that it had entered into a tripartite agreement with Thibault Square Financial Services and Titan Premier Investments in which Titan will receive 20 million new ordinary shares from Shoprite in exchange for deferred shares.
“The proposed transaction will be implemented through the specific issue of 20 million new Shoprite Holdings ordinary shares to Titan in exchange for the agreement by Titan to acquire the Shoprite Holdings ordinary shares held by Thibault and causing the acquisition and cancellation of the deferred shares by Shoprite Holdings,” the group said.
Shoprite is of the view that the cancellation of the deferred shares had added benefits for the group as it would remove uncertainty around a future sale of Thibault and a transfer of significant influence over Shoprite Holdings to a third party.
The group added that the issuance of the consideration shares would result in an economic dilution to shareholders of 3.5 percent.
Shoprite said it was entitled to acquire 40.65 million deferred shares and the total consideration to be paid to acquire all the transaction deferred shares was R265 000.
The board said that the proposed transaction would benefit its shareholders as it would simplify the company’s voting share structure and align the company with international best corporate governance practice.
“All shares in the company post implementation of the proposed transaction will have equal economic and voting rights,” the group added.
The voting interest of minority shareholders will increase from 57.7 percent to 82.2 percent, representing an equal proportion to shareholders’ economic rights in the company post the implementation of the proposed transaction.
“Together with being a simpler and more equitable shareholding structure, the post transaction single class of ordinary shares is believed to be more appealing to institutional investors and may, therefore, have a positive impact on the demand for the company’s shares,” the group said.
The effective date for the proposed transaction is September 30 or after meeting all regulatory conditions.