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Johannesburg - The world's largest retailer, Walmart, has announced a firm intention to make an offer to acquire 51% of for R148 cash per Massmart Holdings [JSE:MSM] share.
Massmart's shares closed on Friday at R141.70 on the JSE.
The companies said in a statement that consideration represents a premium of approximately 19.2% to the volume weighted average price per Massmart ordinary share for the 30 days up to and including September 23 - the last business day immediately prior to the date of the first cautionary announcement.
Following the implementation of the offer, Massmart will remain listed on the JSE.
The Massmart board has appointed Morgan Stanley as its independent financial advisor and Morgan Stanley has indicated that in its view the offer is fair from a financial point of view.
The Massmart board has resolved to support and to facilitate the offer and Walmart has received irrevocable undertakings from certain institutional shareholders to vote in favour of, or to recommend to their clients to vote in favour of, the offer in respect of shares representing approximately 35.2% of the existing issued ordinary share capital of Massmart.
Walmart has also received non-binding letters in support of the offer from other institutional shareholders in respect of Massmart shares representing approximately 15% of Massmart's existing issued ordinary share capital.
The offer is in line with Walmart's strategy to grow its international business by increasing its exposure to emerging markets with high growth potential. Walmart's core proposition is to save people money so they can live better, and this proposition has a strong appeal to consumers in emerging markets, it said.
"Therefore, South Africa presents a compelling growth opportunity for Walmart and offers a platform for expansion into the rest of Africa.
"Within the South African market, Walmart sees Massmart as an ideal entry point into the region and a strategic fit with Walmart's global organisation."
Walmart is attracted to Massmart's talented management team, cultural fit with Walmart, expertise in general merchandise, strong food and consumables business, multi-format capability, and strong regional knowledge and experience, it said.
Massmart's shares closed on Friday at R141.70 on the JSE.
The companies said in a statement that consideration represents a premium of approximately 19.2% to the volume weighted average price per Massmart ordinary share for the 30 days up to and including September 23 - the last business day immediately prior to the date of the first cautionary announcement.
Following the implementation of the offer, Massmart will remain listed on the JSE.
The Massmart board has appointed Morgan Stanley as its independent financial advisor and Morgan Stanley has indicated that in its view the offer is fair from a financial point of view.
The Massmart board has resolved to support and to facilitate the offer and Walmart has received irrevocable undertakings from certain institutional shareholders to vote in favour of, or to recommend to their clients to vote in favour of, the offer in respect of shares representing approximately 35.2% of the existing issued ordinary share capital of Massmart.
Walmart has also received non-binding letters in support of the offer from other institutional shareholders in respect of Massmart shares representing approximately 15% of Massmart's existing issued ordinary share capital.
The offer is in line with Walmart's strategy to grow its international business by increasing its exposure to emerging markets with high growth potential. Walmart's core proposition is to save people money so they can live better, and this proposition has a strong appeal to consumers in emerging markets, it said.
"Therefore, South Africa presents a compelling growth opportunity for Walmart and offers a platform for expansion into the rest of Africa.
"Within the South African market, Walmart sees Massmart as an ideal entry point into the region and a strategic fit with Walmart's global organisation."
Walmart is attracted to Massmart's talented management team, cultural fit with Walmart, expertise in general merchandise, strong food and consumables business, multi-format capability, and strong regional knowledge and experience, it said.
