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Confusion stalks Naivas buyout talks with SA’s Massmart

A senior executive of Naivas says the retail chain is no longer selling a stake in its business. FILE
A senior executive of Naivas says the retail chain is no longer selling a stake in its business. FILE  

Kenyan retail chain Naivas and South Africa’s Massmart Holdings on Wednesday issued conflicting information over the status of buyout talks between the two retailers.

A senior executive of Naivas told Reuters in an interview that the Kenyan retailer is no longer selling a stake in the business even as Massmart Holdings CEO Grant Pattison insisted in an interview that the takeover talks were still on.

Naivas chairman Simon Mukuha had said in August they were looking to sell a majority stake to Massmart, which is owned by the world’s biggest retailer Walmart.

“We are fattening our cow. And when we are ready we will do that (sell) but as it is now we are not,” Gilbert Mwangi, the administration manager at Naivas told Reuters on phone. “They (talks with Massmart) are off. We are not selling now.”

This come as Mr Pattison termed the Reuters report as incorrect.

“We generally do not comment on acquisitions...but that is not true,” Mr Pattison told the CNBC Africa in an interview Wednesday evening. “The statement reported by that newspaper (Reuters) is incorrect.”

Massmart’s pursuit of the deal has triggered a feud at Naivas, where a family member has moved to court seeking to stop his siblings from selling a 51 per cent stake to the South Africa firm majority owned by Wal-Mart.

Massmart has gone beyond Naivas Supermarket in its pursuit of an acquisition target to set up shop in Kenya.

The South African retail giant has been angling for a buyout to enter the Kenyan market where the dominance by local firms has acted as barrier to the entry of giant foreign retailers.

Massmart in August said that it was in contact with a number of key players even as it booked space at the Sh12.6 billion Garden City Mall on Nairobi’s Thika Superhighway set for completion next year.

“Our interest in investing in Kenya is well known and we have met with several important players in that market,” said Massmart in an e-mail response to the Business Daily.

Three of the dominant retailers — Nakumatt, Tuskys and Naivas — are family-owned, making them prime targets for acquisition.

Tuskys shareholders are currently involved in a court battle for control, with some of the directors blaming the power struggle on outsiders engineering an aggressive takeover.

Nakumatt Holdings has been talking of selling a significant stake to a strategic investor to help support its expansion across East Africa. It is owned by the Shah family and Hotnet Ltd, a company associated with former Kilome MP Harun Mwau.

Massmart earlier said that it was entering Kenya through its subsidiary Game. The Johannesburg-listed firm, which Citigroup says is Africa’s third largest distributor of consumer goods, posted sales worth Sh530 billion, making it five times bigger than Kenya’s most profitable firm Safaricom on sales.

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