When Pepkor announced its Flash-Shop2Shop merger back in July, the story sounded straightforward: combine two large merchant networks, build a bigger fintech business, and eventually list it separately. Three months on, the R21.3 billion ($1.3 billion) deal is getting a second look, and not for the reasons the retailer probably hoped.
The concern centres on whether shareholders should have had a say. Pepkor, the South African retail group behind PEP and Ackermans, will hold 57.1% of the combined entity, to be called FintechCo. CEO Pieter Erasmus will indirectly own 13.2% of that business, a stake worth roughly R2.8 billion ($170 million) at the deal's valuation. Some directors and investors feel that detail alone warranted a shareholder vote.
Pepkor's position is that the rules were followed. Under JSE regulations, the transaction qualifies as a Category 2 deal, which requires public disclosure but not a shareholder vote. Erasmus recused himself from all related discussions and decisions. The company also commissioned independent valuations and a voluntary fair opinion, steps that go beyond what the rules technically demand.
It is also worth remembering that none of this came out of nowhere. An Erasmus-linked company already held 31.2% of Shop2Shop before the merger was announced, and Flash and Shop2Shop had been working together since 2020. Pepkor had disclosed those relationships in previous financial statements, so the connections were on the record long before this deal landed.
Egypt, meanwhile, is having its own busy season for listings. Banque du Caire, the country's sixth-largest commercial bank by assets, announced on October 11 that it plans to sell a 30% stake on the Egyptian stock exchange. That makes it the second major IPO in Egypt this month, following MNT-Halan.
Originally published by TechCabal.