(NEWZIMBABWE) Shoprite 'consider' OK Zimbabwe take-over
Shoprite 'consider' OK Zimbabwe take-overby Daniel Misi
31/08/2009 00:00:00
SHOPRITE Holdings would "consider" buying businesses in Zimbabwe to expand its operations in the rest of Africa, the South African retail chain said on Friday.
The company was responding to a report in Zimbabwe's state media reports that it was seeking a controlling stake in OK Zimbabwe.
OK, which has a market value of US$230.6 million (R1.8 billion), is Zimbabwe's second-biggest supermarket chain.
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.
Last 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.
Shoprite already operate 16 African countries, and CEO Whitey Basson said that while he was optimistic about Africa, it is not without obstacles. While there was much money in various countries, the amount of investment capital required remained a challenge.
“People are asking ridiculous returns from investments. It’s still perceived as high risk and rentals in Africa are at least twice or more than that of South Africa and it’s dollar based,” said Basson.
Another obstacle is finding suitable sites because infrastructure is not very developed.
Africa contributes about 14% to Shoprite’s turnover, but profit growth from this sector for the year ended June was more than 50%.
Labels: OK ZIMBABWE, SHOPRITE
posted by MrK @ 3:26 PM
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