Nigerians woke up to the Monday morning news that Shoprite, Africa’s largest food retailer, is nursing plans to sell off its outlets in the country.
It was later clarified that the company is not ‘exiting Nigeria’ but opening up to sell some of its shares in the Nigerian subsidiary to Nigerian investors.
The retail giant made this known in a trading update filed at the Johannesburg Stock Exchange (JSE).
According to the report, the company had commenced 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,’’ it said.
A report on TheCable has revealed that there is an ongoing corporate tussle among three entities to bite into the larger stake of the retailer.
However, Persianas Nigeria Limited, a property development company, owned by Tayo Amusan, is said to be the preferred bidder for the Shoprite stake.
Amusan is a businessman invested in property development. Some of his property house the stores of Shoprite.
Persianas was founded in 1990 by Amusan, in 2004, he founded The Palms in Lagos, and due to its success and popularity, he floated three additional malls in Enugu, Kwara, Ota and Ibadan.
Presently, Amusan sits on the board of several Nigerian companies, including African Paints Nigeria Limited, and he is also the chairman of Resourcery Limited.
It was learnt that the other contenders, are also into property development but with links to a foreign country, and a South African company backed by South Africa’s pension fund.
Though Amusan seems to be the most preferred option, the other bidders are pushing negotiations hard.
We also understand that the new deal to be struck would have Shoprite retain the management of its chain of operations, brand name, trademarks, and supply chain.
In an internal memo of July 31 seen by Newsmen, Carl Erickson, general manager of the retailer, informed employees that the revision in the business 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.”
There was a sharp decline in sales of 6.3 percent in the 2020 fiscal year, as posted by Shoprite.
It’s been almost 15 years since the retail giant launched its operations in Nigeria, in December 2005, moving from one in Lagos to more than 25 retail stores in eight cities across Nigeria.