Steinhoff to buy remaining JD Group shares for R1.2bn

Johannesburg - Steinhoff [JSE:SHF], the retailer which last year agreed to buy Pepkor for R62.94bn, said it would buy out fellow investors in furniture chain JD Group [JSE:JDG].

The company will offer R34 per share for the 13.22% stake it doesn’t already own, a deal valued at about R1.2bn, Steinhoff said in a statement on Tuesday.

It will then seek to delist the unit. JD Group shares gained 17% to an 18-month high of R32.85 as of 13:36 in Johannesburg, valuing the company at R8.8bn.

The deal will give Steinhoff greater flexibility in restructuring JD Group, cut the costs related to the furniture retailer’s JSE listing in Johannesburg and will also simplify Steinhoff’s “corporate and operating structure,” the company said.

Steinhoff increased its stake in JD Group last year to shore up the unprofitable company’s finances amid a downturn in consumer spending. Retailers in Africa’s most industrialised economy have struggled due to unemployment of about 25%, strikes and high levels of personal debt.

Steinhoff plans to pay for the stake with existing cash and has been given irrevocable undertakings from shareholders that own more than half the remaining shares to vote in favour of the deal, the company said.