Shoprite, Africa’s largest food retailer, announced on Monday it is considering selling off its majority share in its Nigerian subsidiary.
In a trading update filed at the Johannesburg Stock Exchange (JSE), the retail giant said it has begun 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.
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 properties house the stores of Shoprite.
Amusan founded Persianas in 1990. In 2004, he launched, The Palms. Owing to the success of The Palms in Lagos, he floated three additional malls in Enugu, Kwara, Ota and Ibadan.
Amusan sits on the board of several Nigerian companies, including African Paints Nigeria Limited, and he is also the chairman of Resourcery Limited.
The two other contenders are said to be another property development company but with links to a foreign country, and a South African company backed by South Africa’s pension fund. Though Amusan is mooted to be the favoured investor, the other bidders are pushing negotiations hard.
TheCable understands the deal will involve Shoprite retaining the management of its chain of operations, brand name, trademarks, and supply chain.
In an internal memo of July 31, 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.”
Shoprite posted a sharp decline in sales of 6.3 percent in the 2020 fiscal year.
The retailer launched in Nigeria nearly 15 years ago, opening its first store in Lagos in December 2005.
That chain has grown from one to more than 25 retail stores across Nigeria — including some of the biggest retail stores in west Africa.