Massmart receives non-binding expression of interest from Walmart
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This morning, Massmart issued a cautionary announcement on the Johannesburg Stock Exchange informing our stakeholders that we have received a non-binding expression of interest from Walmart that could lead to a cash offer of R148 per share for the entire issued share capital of the company.
In summary, the cautionary announcement covered three points:
- That Massmart has received a non-binding expression of interest from Walmart;
- That the non-binding expression of interest could lead to Walmart making a cash offer of R148 per share for the entire issued share capital of the company; and
- That Massmart and Walmart have entered into an exclusivity period to discuss the non-binding expression of interest.
We are at the beginning of the process and it is difficult to say how long it will take or whether it will lead to an offer. The immediate next steps will be a confirmatory due diligence exercise, whereafter regulatory and shareholder approvals will be sought.
Commenting, Grant Pattison, CEO of Massmart, said: “Walmart’s interest represents a vote of confidence in South Africa, as well as in Massmart and all its employees.”
Walmart is the world’s largest retail company, and whilst it is largely known for its US operations, it has operations in 15 countries. Walmart employs more than 2 million people around the world and achieved sales of $405 billion in fiscal 2010. It is worth noting that Walmart has relationships with unions, at some level, in approximately half of the countries in which it operates.