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(HERALD) Shoprite eyes controlling stake in OK Zim

Shoprite eyes controlling stake in OK Zim
By Bright Madera

SHOPRITE Holdings Limited, South Africa’s largest grocery chain, is said to have entered into negotiations with OK Zimbabwe to acquire a controlling stake in the Zimbabwe Stock Exchange-listed retail counter, Herald Business has learnt.

The Johannesburg Stock Exchange-listed company first entered Zimbabwe in November 2000 with the opening of a Shoprite outlet in Bulawayo, the only branch in the country.

Details of the deal are still sketchy, but sources close to Herald Business indicated that negotiations were still at preliminary stages.

Shoprite chief executive, Whitey Basson told South African media recently that the retail group was looking at expanding into the region.

Basson was quoted saying that the Shoprite brand was in an excellent position to expand into the African market outside South Africa.

South African investors have been making inroads into Zimbabwe following the restoration of investment confidence ushered by the inclusive Government.

Another South African grocery shop, Mr Price has already established branches in Harare following the rebound of the country’s retail sector.

This week, OK Zimbabwe issued a statement advising shareholders to exercise caution and to consult their professional advisors in dealing with their shares in the company.

"OK Zimbabwe Limited advises its shareholders that the company has entered into negotiations which, if concluded, will have a significant impact on its business," read part of the statement.

Zimbabwe’s economy has started to register positive growth after years of successive negative growth, with indications that it recorded a growth rate of 1,8 percent during the first quarter of this year.

This development has attracted a number of regional and international investors to invest in the fast growing sectors.

With the South African economy reported to have contracted for the third quarter in succession between April and June, the move could be a strategy by South Africans to flight their investment to potential Zimba-bwean operations.

Shoprite Holdings Limited is an investment holdings company that, through its subsidiaries, constitutes a fast moving consumer goods retail operation on the African continent.

In results released this week, Shoprite reported a significant rise in full year profit. Diluted headline earnings per share for the year to end in June jumped 30,9 percent to 390.8 cents in line with its own forecast of a 25-35 percent rise.

Total turnover climbed 24,5 percent to US$7,62 billion from 5,8 billion the previous year.

Its primary business is food retailing to consumers of all income levels.

The Company is organised into two main business segments: supermarkets, including fresh produce and franchise, and furniture, including insurance.

It owns and operates Shoprite, Checkers, Checkers Hyper, Usave, MediRite, OK Furniture, House & Home, Power Express, Hungry Lion, OK Foods, OK Grocer, OK MiniMark, Sentra and Value, and Megasave.

The Shoprite Group currently trades with 1 068 corporate and 275 franchise outlets in 17 countries across Africa, bringing the total number of stores in the group to 1 343.

Shoprite is in Uganda, Zambia, Nigeria, Tanzania, Mozambique, Mauritius, Malawi, Madagascar, Ghana and Angola.

The Shoprite Group started in 1979 with the purchase of a chain of eight supermarkets for R1 million.

The next 30 years were marked by various acquisitions and innovative expansion strategies that brought it to the R48 billion business that Shoprite is today.

OK Zimbabwe de-merged from Delta in September 2001 and has emerged as one of the leading retail supermarket chains in the country.

Labels: OK ZIMBABWE, RETAIL, SHOPRITE

posted by MrK @ 3:54 PM