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South Africa's Shoprite cuts chairman Wiese's voting influence
JOHANNESBURG, April 18 (Reuters) - South African grocer
Shoprite is to buy back deferred shares held by its
chairman Christo Wiese to simplify its voting structure but
substantially curbing Wiese's influence in the company he helped
turn into an African powerhouse.
Besides ordinary shares, Shoprite's capital structure
includes deferred shares which carry about 32.3 percent of the
voting rights at Shoprite. The deferred shares are held by
Weise's investment vehicle, Thibault Square Financial Services
Under the deal, Titan - another one of Wiese's entities -
will receive 20 million new ordinary shares from Shoprite, in
exchange for deferred shares which Shoprite will buy for 265,000
rand ($18,836.41) and cancel, the retailer said in a statement.
The proposed deal will see Wiese's voting interest reduced
to 17.8 percent from 42.3 percent, while his direct shareholding
will increase to 17.8 percent from 14.8 percent, Shoprite said.
Following the issuance of the new shares, the total voting
interest of minority shareholders will increase from nearly 60
percent to more than 80 percent, while their shareholding will
be diluted by 3.5 percent, it added.
Wiese has been instrumental in Shoprite's transformation
from just six outlets in South Africa in the 1970s to 2,800
shops across Africa, dwarfing rivals including Walmart Inc's
South African unit Massmart.
Shoprite, which also sells furniture and medicine, said the
deal is expected to result in a potential once-off reduction in
earnings and headline earnings of 3.3 billion rand, based on a
30-day-volume-weighted-average price of 165.35 rand per share as
at April 17.
($1 = 14.0685 rand)
(Reporting by Nqobile Dludla; editing by Emelia
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