HomeNewsPick ’n Pay bulks up to 49% in TM

Pick ’n Pay bulks up to 49% in TM

-

Meikles Limited has disposed an additional 24% of TM Supermarkets to its South African associate Pick’n Pay Stores Limited, allowing South Africa’s second-largest food and accessories retailer to bulk up to 49%.

The deal comes as the conglomerate finalises talks to sell its equity interest in Kingdom Financial Holdings and invites bids for Cotton Printers, which is in liquidation.

Pick’n Pay on Tuesday disclosed that it paid $13 million for the stake, in a deal that is still awaiting regulatory approval from the South African Reserve Bank, which administers the country’s exchange control legislation, and Zimbabwe’s regulatory authorities.

These include the Reserve Bank of Zimbabwe, the Indigenisation ministry and the Competition and Tariff Commission.

There appear to be no regulatory hurdles to the deal since Pick’n Pay has not breached the 49% equity ceiling for foreign investors, in terms of Zimbabwe’s Indigenisation and Economic Empowerment Act, which warehouses 51% equity for local players.

The disposer, Meikles Limited, was not available for comment.

But a source who has been closely following the deal says the disposal is meant to recapitalise Zimbabwe’s largest, fast-moving consumer goods (FMCG) chain, which has lost significant market share to many small players, who now control more than 50% of the local FMCG market.

Under an agreement signed early this year, a number of TM supermarkets will trade as Pick’n Pay stores, including TM Chadcombe.

Pick’n Pay will also second management to the TM Supermarkets board.

Pick’n Pay last month said it would accelerate the expansion of its footprint in Africa to cordon off US retailer Wal-Mart, which plans to leapfrog onto the continent. Its deal to acquire South Africa’s discount retailer Massmart is close.

Pick’n Pay said it is in talks to open new stores in Mauritius, Malawi, Mozambique and Zambia over the next 12 months.

The retailer’s foreign chain is currently 26 stores, which is set to grow with its new interest in TM Supermarkets, which operates 54 stores in the country.

Recent Posts

Stories you will enjoy

Recommended reading