Bain offers $3.5b for S. Africa retailer
Shares in Edgars Consolidated Stores Ltd. jumped nearly 11 percent today on news that Boston-based Bain Capital LLC has made a $3.5 billion buyout offer for South Africa's largest fashion retailer.
The Edcon board recommended shareholders accept the offer from Bain, one of the world's largest private equity investors, to acquire its entire ordinary share capital at $6.40 per share.
At midday, Edcon shares on the Johannesburg Stock Exchange were up 10.93 percent at $6.20, from $5.56 Wednesday.
In October, the retail group said it was in acquisition talks with a number of private equity companies.
Selwyn MacFarlane, Edcon's nonexecutive chairman, said the company was "delighted that a global fund of the caliber of Bain Capital has demonstrated its confidence in South Africa."
"This substantial capital inflow by a global private equity firm is unprecedented in South Africa and bears testimony to our country becoming a notable participant in the international community," he said. "It also represents a fundamental belief in the strength of our economy."
Steve Zide, a managing director of Bain Capital, said belief in South Africa's potential for growth was a significant factor in the decision.
"The company is a leader in the retail and business communities in South Africa, and its brands enjoy iconic status throughout the country," he said.
(AP)
