Back in 2016, when Steinhoff was still viewed as a company with an ounce of credibility and integrity, they acquired Tekkie Town for R3,2 billion.
You’d think that sale would mean the sellers would be putting their feet up and laughing all the way to the bank, but they’ve actually filed papers in the Western Cape High Court to have the acquisition cancelled.
The papers were filed on Thursday and, according to Warren Erfmann, previously a non-executive director of Tekkie Town, they want the deal cancelled “on the basis that what Steinhoff was representing at that time was false”.
“It’s fairly straightforward,” says Erfmann. “We believe we were misled by Steinhoff as the withdrawal of its financial statements have indicated, and we want the court to cancel the transaction and return the business to its original owners.”
When it rains it pours, hey Markus?
Cancelling the deal won’t be all that straightforward, though, given that “Steinhoff vended Tekkie Town into Steinhoff Africa Retail (Star) last year, which listed separately on the JSE”.
Some details of how the purchase played out:
Steinhoff purchased the entire shareholding of Tekkie Town for a consideration of R3.2 billion. Steinhoff used its own shares as consideration for 58% of the transaction. The majority of the 58% belonged to AJVH Holdings, an entity controlled by Braam van Huyssteen, the founder of Tekkie Town, and Bernard Mostert, the CEO of both Tekkie Town and Star’s Speciality Fashion and Footwear division. The balance of Tekkie Town was owned by private equity firm Actis, which sold for cash.
Moneyweb reached out to Van Huyssteen, and he was clearly not amped about the association with Steinhoff:
“We started this business in Mossel Bay in 1989 and brick-by-brick we built it up over the last few decades. People entrusted us to look after the business – our employees and our shareholders – and we were confident at the time that we did the Steinhoff deal that it would be the right home for us. But the last few months have proven this to be otherwise.”
Fair play, because it takes quite a backbone to turn down more than R3 billion. Although, as one person pointed out, that might have more to do with the fact that 58% of the purchase price was apparently paid in Steinhoff shares.
Either way, I’d be feet up on the other side of the world by now.
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