Shoprite Holdings, Africa’s biggest grocer, had offered to repurchase shares trading on the Lusaka Stock Exchange from Zambian investors to settle a dispute, two people familiar with the matter said on Friday.
Shoprite had offered to buy the securities at a 25 percent discount to the price on the Zambian bourse, where the company, which is based in Cape Town, has a secondary listing, one source, who asked not to be identified because the talks were private, said.
The proposal was rejected because it was too low, the person said. Sarita Van Wyk, a Cape Town spokeswoman for Shoprite, said she was not immediately able to comment.
The retailer is suing some shareholders of its Zambian unit in an effort to reverse the purchase of shares now worth more than R302 million.
In papers filed in the Lusaka High Court in July, Shoprite said its representative in Zambia illegally sold the shares at a discount to the local pension funds of companies, which included Standard Chartered, Standard Bank, Sandvik and SABMiller.
Shoprite shares closed unchanged at 63 kwacha (R115) on September 20 in Lusaka, a 36 percent discount to the securities in Johannesburg, where the stock is mostly traded.
The South African-listed equities have dropped 12 percent this year after gaining 50 percent last year.
The case was adjourned until today to allow Shoprite and the investors to start talks that “may result in the resolution of the dispute”, Judge Flavia Chishimba wrote in court papers dated September 18.
Shoprite’s shares have traded on the Lusaka Stock Exchange since February 2003.
Shoprite’s Zambian representative director, Lewis Chisanga Mosho, sold more than 1.67 million of the retailer’s shares at discounts of as much as 57 percent of the JSE price, according to court papers filed by Shoprite. This was against his mandate and unlawful, the company said.
Mosho did not answer a call to his cellphone on Friday. An e-mail sent on October 15 seeking comment was returned as his message box was full.
The case before the Lusaka High Court is an abuse of the legal process because Shoprite has already tried to sue Mosho and Lewis Nathan Advocates, where he was a partner, in the Kitwe High Court over the sales, according to a filing by Ventus Legal Practitioners.
In papers filed on July 29, the Lusaka law firm, which represents some of Shoprite’s shareholders, asked the court to dismiss the retailer’s case. Shoprite opposed them on September 16.
Blackstar Group, an investment company based in Luxembourg, was part of the group fighting Shoprite’s attempts to reverse the share trades, the company said on September 30.
Andrew Bonamour, the chief executive of Blackstar’s investment advisory business, declined to comment on Friday.
Shoprite raised the wages of its lowest paid Zambian workers by 34 percent above the minimum wage for their job levels, Robert Musanje, the president of National Union of Commercial and Industrial Workers, said on October 23.
On October 16, the retailer reversed a decision to fire about 2 200 striking workers after government pressure, Van Wyk said on October 18.
The case is Shoprite Holdings and Shoprite Checkers v Saturnia Regna Pension Trust Scheme and 24 others. Shoprite closed 1 percent higher at R180.80 on the JSE on Friday.