SA billionaire Christo Wiese cuts stake in Shoprite to free up cash

South African billionaire Christo Wiese agreed to a price-protection arrangement on some of his shares in grocer Shoprite Holdings Ltd that led to banks placing about R3.6 billion ($265 million) of stock.

FirstRand Ltd’s Rand Merchant Bank and Barclays Africa Group Ltd’s Absa Capital placed about 17 million shares with institutions at R210 apiece, compared with a Tuesday closing price of 224.89 rand, according to an emailed statement Wednesday. The placement was instigated by one of Wiese’s investment vehicles, Titan Premier Investments (Pty) Ltd, which is Cape Town-based Shoprite’s biggest shareholder.

Wiese has been selling assets to raise money since Steinhoff Holdings International NV, another retailer in which he was the largest investor, announced accounting irregularities in December. The 76-year-old personally sold about 4.2 billion rand worth of Shoprite shares over three separate deals in the wake of the scandal. He’s also offloaded stock in companies including drugmaker Aspen Pharmacare Holdings Ltd. and investment company Brait SE.

Titan owns about 79 million shares in Shoprite, representing about 14% of the grocery chain, and doesn’t expect to make further transactions in the company, according to the statement. The deal was done using a so-called collar transaction, which enables Titan to protect a portion of its Shoprite stake and to better manage its balance sheet, it said.

“Titan continues to believe in the long-term value of Shoprite and will remain a strategic investor in the company,” it said.

Shoprite shares fell as much as 8.8% in Johannesburg on news of the discount sale, the most in 10 years, and traded 5.2% lower at R213.19  as of 2:20 p.m. in Johannesburg.

Steinhoff stock has crashed more than 97 percent since reporting the financial wrongdoing on Dec. 5, causing a slump in Wiese’s net worth to $2.2 billion from more than $5 billion. He’s suing the owner of Conforama in France and Mattress Firm in the US for R59 billion.

Shoprite’s stock has slid 10% over the same period, valuing the company at R126 billion.

In late 2016, Wiese had sought to merge the grocer with Steinhoff only for the talks to collapse amid a disagreement over valuations. The billionaire bought into Steinhoff when he sold his Pepkor Holdings Ltd, Africa’s biggest clothing chain, to the company for $5.7 billion in 2015.

The retail entrepreneur will remain the company’s biggest shareholder, based on data compiled by Bloomberg.

Read: Wiese sues Steinhoff for R59 billion

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SA billionaire Christo Wiese cuts stake in Shoprite to free up cash