PRICE-PROTECTION COLLAR
Shoprite up on news Christo Wiese has not sold shares
Shoprite’s share price on Thursday recovered some of the ground it lost the previous day when it became apparent its single largest shareholder, Christo Wiese, had not sold any shares but had provided increased security for bank loans. The share closed 1.57% firmer at R215.30. A Bloomberg news report that Wiese had placed 17-million Shoprite shares with institutions sparked jitters and knocked the share price from R224.89 to a six-month low of R211.98. However a Sens announcement released by Shoprite on Thursday indicates that Wiese has not sold the shares but has put in place a so-called price-protection collar, designed to protect the value of 17-million Shoprite shares provided by Wiese as collateral for loans.
The Sens announcement provided shareholders with little clarity but did give the details of an option programme, which is designed to protect Wiese’s banks from significant weakness in the Shoprite share price until June 2020. Wiese was not available to shed light on...
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