Shoprite is pressing ahead with talks for a R166-million purchase of Zimbabwe's largest food retailer, OK Bazaars, despite fears about the nationalisation of one of the country's oldest companies, Kingdom Meikles Africa (KMAL)
The KMAL saga shows that despite a 280% rise in the Zimbabwe Stock Exchange (ZSE) this year, the risk of government expropriating assets remains high. It also casts doubt on President Robert Mugabe's claims at last week's Harare mining indaba that "property rights are sacrosanct".
However, Shoprite chairman Christo Wiese (pictured) told Business Times this week that while the KMAL case "does make investors wary, we've never had any threats ourselves". Wiese also chairs Pepkor, which has an established Zimbabwean business.
"We're like good Africans: we're confident a solution will be found, and we believe the whole of southern Africa will enter a new era over the next five to 10 years."
A team of Shoprite advisors has been in Harare in recent weeks to negotiate with OK Bazaars.
OK is valued at $45-million (R334-million) on the Zimbabwe Stock Exchange according to Harare-based Renaissance Capital. Shoprite would need to pay R167-million (plus a small sweetener) for control. On Friday, OK renewed its warning to investors that it was still in "negotiations" with an unnamed party.
Wiese said he "cannot comment" on the OK negotiations.
Shoprite operates in 16 countries, including a small operation in Bulawayo. Any purchase of OK would throw it into competition with South African rival Pick n Pay, which has a 25% stake in TM Supermarkets - which, ironically, is controlled by KMAL.
