| Tue 2 Nov 2010, 8:00 | | PIK - Pick N Pay increases its shareholding to 49% of Zimbabwe-Based TM |
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PIK
PIK
PIK - Pick N Pay increases its shareholding to 49% of Zimbabwe-Based TM
Supermarkets
Pick n Pay Stores Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1968/008034/06)
Share Code: PIK ISIN code: ZAE000005443
PICK N PAY INCREASES ITS SHAREHOLDING TO 49% OF ZIMBABWE-BASED TM SUPERMARKETS
Pick n Pay confirmed today that it had purchased another 24% of Zimbabwe
operation TM Supermarkets, where it already has a 25% share, bringing its total
shareholding to 49%.
The transaction remains conditional on the approval of the relevant Zimbabwe
regulatory authorities and the South African Reserve Bank. The transaction is
expected to close by the end of March 2011.
Pick n Pay CEO Nick Badminton said that the deal, worth about US$13-million, was
signed on 27 October.
"Meikles and Pick n Pay have entered into a shareholder`s agreement to drive
this initiative. Certain stores will be re-branded as Pick n Pay stores, so that
we can provide a retail experience similar to that provided in South Africa. We
welcome the opportunity to participate more meaningfully in the stabilisation of
the Zimbabwe economy and are excited to participate in the turnaround that is
expected."
The TM Chain is the largest chain of retail stores in Zimbabwe, by number of
stores, with 51 retail outlets. Further into Africa, Pick n Pay currently
operates 17 stores in Namibia, 12 in Botswana, 7 in Swaziland and 1 in Lesotho,
together with the first Zambian store which opened in July.
Pick n Pay`s strategy into Africa has mainly been through partnering with locals
and the franchise route, where local experts own the franchise in their own
communities. Direct investment is considered on a case by case basis and the
corporate store opened in Zambia is an example of this.
This investment in TM will inject new capital into the business, and allow for
much needed refurbishment, including new fittings, generators and point of sale
equipment.
Specifications, that were under review by the Zimbabwe government, have now been
lifted and the relisting of Meikles, the remaining shareholder, was implemented
in March 2010 on the Zimbabwe Stock Exchange.
"Pick n Pay first made the investment in TM in 1996. TM has done an extremely
good job in this business during very difficult times, facing and enduring
severe economic deprivation, hyperinflation, currency collapse and an erratic
merchandise availability.
The conversion to the US Dollar as the currency in Zimbabwe has provided a
significant amount of stability and was a key factor in our decision to purchase
this additional shareholding. With the additional capital available, we believe
there is significant upside potential in the TM operation, which is extremely
well run and well regarded in Zimbabwe," said Nick Badminton.
For further information, please contact Tamra Veley on 083 251 3658.
By order of the board
Cape Town
02 November 2010
Investment Bank and Sponsor:
Investec Bank Limited
Date: 02/11/2010 08:00:01 Produced by the JSE SENS Department.
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