Sequel to the decision by ShopRite Nigeria to sell its majority shares and exit the Nigerian market by Monday, there is clear indication that a Nigerian real estate mogul is poised to buy the company.
According to a trading update filed at the Johannesburg Stock Exchange (JSE), the retail giant said it has begun the formal process of liquidating its majority share.
“Following approaches from various potential investors, and in line with our re-evaluation of the group’s operating model in Nigeria, the board has decided to initiate a formal process to consider the potential sale of all, or a majority stake, in Retail Supermarkets Nigeria Limited, a subsidiary of Shoprite International Limited. As such, Retail Supermarkets Nigeria Limited may be classified as a discontinued operation when Shoprite reports its results for the year,’’ the company said.
Based on moves by owners of the South African retail giant, Persianas Nigeria Limited, a property development company, owned by Tayo Amusan, is said to be the favoured bidder for the Shoprite stake.
Amusan is a real estate investor on whose properties majority of Shoprite stores are housed.
Amusan founded Persianas in 1990. In 2004, he built The Palms, Lagos. Due to the success of The Palms, he floated three additional malls in Enugu, Kwara, Ota and Ibadan.
The two other contenders are said to be another property development company but with links to a foreign country, and a South African company backed by South Africa’s pension fund. Though Amusan seems to get the nod as favoured investor, even though the two other investors are not relenting in their pursuit to buy the grocery giant.
The deal will see Shoprite retaining the management of its chain of operations, brand name, trademarks, and supply chain.
According to an internal memo dated July 31, Carl Erickson, general manager of the retailer, informed employees that the change ShopRite is about to have is to make the company ‘’truly Nigerian’’.
The memo read: “The expansion of the retail business in Nigeria to a greater consumer market should remain everybody’s shared vision. It has, however, become apparent that the best manner in which to do this is by engaging Nigerian investors who share in this vision. In so doing we will be creating a truly Nigerian business run and owned by Nigerians for the Nigerian market.”
The company which was launched 15 years ago posted a sharp decline in sales of 6.3 percent in the 2020 fiscal year.