South African billionaire Christo Wiese acquires new stake in Shoprite worth $25.8 million

South African billionaire businessman Christo Wiese has bought more shares in Africa’s largest retailer, Shoprite in a move that reflects his confidence in the long-term value and earnings power of the retail behemoth.

According to a recent bourse filing, Wiese, the former chairman of the Johannesburg-based retailer who built his Pepkor retail empire by offering bargain prices in South Africa, purchased 20,000 single stock futures contracts at a total value of R413.6 million ($25.8 million).

Data gathered by Billionaires.Africa revealed that the billionaire acquired 2 million ordinary shares in Shoprite at a value of R413.6 million ($25.8 million).

The contracts were purchased in four transactions at an average price of between R202.53 ($12.6) and R207.69 ($12.92) per share through one of his companies, Toerema. The highest price paid in the transaction was R209 ($13).

The execution of the futures contracts comes nearly a week after the retail company announced that Wiese would finally exercise a cash-settled share-based payment of 1 million shares granted to him in 2003.

Under the terms of the share-based payment, the South African billionaire is entitled “to receive a cash payment based on the difference between the share price at the date of exercise of the rights and the strike price at the date of the grant.”

The strike price at the date of the share-based payment deal in 2003 was R6.5 ($0.4) per ordinary share. The retail mogul exercised the transaction on Dec. 6, when the retailer’s share price closed at R202.04 ($12.57) per share.

As of June 2021, Wiese’s held a 10.67-percent stake in Shoprite, amounting to 63,110,920 ordinary shares in the group.

The execution of the futures contracts will see his stake in Shoprite rise to 65,110,920 shares, as he retains his position as the second-largest shareholder in the retail group.

In addition to his ordinary shares, Wiese holds 305.6 million non-convertible, non-participating, no-par-value deferred shares in the retailer, which represents 32.2 percent of Shoprite’s voting rights.

As of press time, Dec. 14, shares in Shoprite on the Johannesburg Stock Exchange were trading at R208 ($12.94), 142-basis points higher than its opening price this morning.

At this price, the market value of Wiese’s ordinary shares is R13.54 billion ($842.6 million).