Wal-Mart offers to take 51% of MassMart
November 29, 2010-- Home Textiles Today,
Bentonville, Ark. - After several weeks of negotiations, Wal-Mart Stores Inc. has offered to acquire 51% of the shares of the Johannesburg, South Africa-based Massmart Holdings Limited.
Massmart group operates nine wholesale and retail chains as well as one buying group. The company's four operating divisions follow a model similar to Wal-Mart's - high volumes and low-cost distribution - with 288 stores and 470 buying group members in 14 countries in sub-Saharan Africa.
The U.S.-based retailer scaled back its original plan to buy all of Massmart.
The price per Massmart ordinary share is ZAR148 - equivalent to $20.67.
The offer represents a 19.2% premium to the 30-day weighted average price on Sept. 23, the last trading day prior to the indicative offer announced on Sept. 27, which was unanimously recommended by the Massmart board of directors.
The offer needs the approval of Massmart's shareholders. Offer documents are expected to be mailed to Massmart's shareholders by Dec. 9, 2010.
"The due diligence effort we have conducted over the last eight weeks has underlined our confidence that this is a compelling combination that will create significant value for both companies, and we look forward to participating in the regulatory process to complete this acquisition," said Andy Bond, evp with responsibility for Walmart's operations in the region, including the United Kingdom and Africa.
Added Doug McMillon, president and ceo of Walmart International: "The more we learn about South Africa and the surrounding countries the more we are convinced that this is an important region with attractive growth characteristics. This combination fits perfectly with our strategy to enter high growth markets in which we can apply our global expertise and generate strong returns."
Massmart will continue to trade on the JSE Limited to provide Massmart shareholders with the ability to participate in the growth opportunity of the combined entity.
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