The Shoprite board has announced that it could not get sufficient shareholder support for buying the high-voting shares of the company’s founder Christo Wiese, valued at R3.3bn. For Wiese, the decision constitutes yet another blow after much of his wealth was wiped out in the Steinhoff saga, but it also means he remains the dominant force in the company.
Shoprite has announced that its proposal to buy out company founder Christo Wiese’s high-voting shares for R3.3bn received broad support in principle from shareholders, but not enough to allow the deal to go through. Consequently, it had been cancelled.
The announcement brings to an end a somewhat controversial proposal to convert Wiese’s high-voting shares into ordinary shares. Effectively that would have meant the company would issue new, ordinary shares to Wiese worth about R3.3bn and scrap the old, high-voting shares.
The board’s argument was that the deal would simplify the company’s voting share structure and align the company with international best corporate governance practice. This is because all the shares after the deal would have the same voting rights. This, the board said, would appeal to institutional investors and would have increased a positive demand for the company’s shares.