Shanduka-Pembani deal sows confusion

2014-11-30 15:00

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The R11?billion merger announced this week between Deputy President Cyril Ramaphosa’s Shanduka and Pembani Group has complicated Ramaphosa’s exit strategy from the group.

The deal that would separate Ramaphosa from Shanduka’s myriad “regulated” businesses and resolve his conflicts of interest saw the small Mabindu Trust grow from a 1.45% shareholder to holding 49.5% and dominating Shanduka.

The trust is to buy out Ramaphosa and other former managers with vendor finance from the Shanduka group itself, according to Shanduka CEO Phuti Mahanyele.

According to Donne Nicol, a Mabindu trustee, the executive director of the Shanduka Foundation and a long-time associate of Ramaphosa, Shanduka shareholders signed off on this deal on Tuesday.

After Mabindu became the major shareholder in Shanduka, Nicol and her fellow trustees would appoint directors for the group, she told City Press.

Then, also this week, Standard Bank and the China Investment Corporation brought the Pembani deal to the board, according to Nicol.

While similar to the merger originally announced in May this year, it is technically a new deal after the first one had fallen through, she said.

Now the role of Mabindu in the proposed merged company will be something that “plays out in the negotiations”.

According to Mahanyele, the deal was struck between Pembani and Shanduka’s shareholders without her knowing.

On Wednesday, Shanduka put out a press release saying the long-awaited deal had fallen through.

On Thursday, it put out a new release announcing the deal was in fact on, indicating that Shanduka management seems to be out of the loop.

Apart from cash, Ramaphosa is leaving Shanduka with some of its property holdings as well as its 70% stake in local operations of MacDonald’s restaurants.

The original Pembani-Shanduka merger was billed as creating a R13.5?billion company, but this week’s deal promised to create a R11?billion group.

The difference stems from assets taken out by Ramaphosa and other shareholders as part payment for their shares, according to Mahanyele.

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