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Edcon shareholders OK buyout

Edcon shareholders OK buyout

JOHANNESBURG – Shareholders in Edcon voted for the proposed US$3,5 billion buyout of the fashion retailer, in South Africa’s biggest private equity deal to date, pushing its shares and the rand higher.

The backing of Bain Capital’s 25 billion rand buyout sent shares in Edgars Consolidated Stores Ltd (Edcon) up 2,20 per cent to 45,48 rand at 1033 GMT yesterday, beating a 0,64 per cent gain in the blue chip Top-40 index. An official overseeing the count said 80,6 per cent of votes were in favour of the deal.Bain Capital needed 75 per cent shareholder approval for the deal to succeed.South Africa’s rand rose 1,1 per cent to 7,11 rand against the US$ after shareholders approved the buyout.The deal represents a potential inflow of foreign direct investment into South Africa that would be the biggest since Barclays bought a majority stake in Absa in 2005.”We (Bain) look forward to working as part of the South African business community with the management and employees of Edcon to enhance the company’s leading market position,” Dwight Poler, the Managing Director of Bain Capital said.Edcon’s non-executive chairman, Selwyn MacFarlane, said the retailer was pleased that shareholders had voted overwhelmingly in favour of the transaction, “…allowing them to realise substantial value from their investment.”Edcon’s board had advised shareholders to accept the offer.The retailer said Bain’s offer represented a 61,6 per cent premium to the 30-day volume weighted average price of Edcon ordinary shares on October 16, the day before the group first said it was in talks.Bain beat private equity firms Kohlberg Kravis Roberts & Co.and Blackstone Group LP in the auction for Edcon.It offered 46 rand per ordinary share and 2 rand for every preference share valuing the deal at 25 billion rand.South Africa’s largest fund manager, the state-owned Public Investment Corporation (PIC), said on Friday it had already voted by proxy against the buyout as it wanted to keep its stake.Edcon spokeswoman Tessa Christelis said the company now needs to get approval from the competition authority and from South Africa’s Reserve Bank.South Africa’s retail sector has seen new interest from foreign and local private equity players, with Africa’s largest grocery chain Shoprite attracting a 15,22 billion rand offer from Brait late last year.Nampa-ReutersAn official overseeing the count said 80,6 per cent of votes were in favour of the deal.Bain Capital needed 75 per cent shareholder approval for the deal to succeed.South Africa’s rand rose 1,1 per cent to 7,11 rand against the US$ after shareholders approved the buyout.The deal represents a potential inflow of foreign direct investment into South Africa that would be the biggest since Barclays bought a majority stake in Absa in 2005.”We (Bain) look forward to working as part of the South African business community with the management and employees of Edcon to enhance the company’s leading market position,” Dwight Poler, the Managing Director of Bain Capital said.Edcon’s non-executive chairman, Selwyn MacFarlane, said the retailer was pleased that shareholders had voted overwhelmingly in favour of the transaction, “…allowing them to realise substantial value from their investment.”Edcon’s board had advised shareholders to accept the offer.The retailer said Bain’s offer represented a 61,6 per cent premium to the 30-day volume weighted average price of Edcon ordinary shares on October 16, the day before the group first said it was in talks.Bain beat private equity firms Kohlberg Kravis Roberts & Co.and Blackstone Group LP in the auction for Edcon.It offered 46 rand per ordinary share and 2 rand for every preference share valuing the deal at 25 billion rand.South Africa’s largest fund manager, the state-owned Public Investment Corporation (PIC), said on Friday it had already voted by proxy against the buyout as it wanted to keep its stake.Edcon spokeswoman Tessa Christelis said the company now needs to get approval from the competition authority and from South Africa’s Reserve Bank.South Africa’s retail sector has seen new interest from foreign and local private equity players, with Africa’s largest grocery chain Shoprite attracting a 15,22 billion rand offer from Brait late last year.Nampa-Reuters

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