trending Market Intelligence /marketintelligence/en/news-insights/trending/jlLVGdtAQuotc59fuyY1kg2 content esgSubNav
In This List

Update: Executive chairman resigns in latest blow to Steinhoff

Case Study

A Sports League Maximizes Revenue from Media Rights


Japan M&A By the Numbers: Q4 2023


Essential IR Insights Newsletter Fall - 2023

Case Study

A Corporation Clearly Pinpoints Activist Investor Activity

Update: Executive chairman resigns in latest blow to Steinhoff

Christoffel Wiese, known as Christo and widely regarded as one of South Africa's most successful and influential businessmen, on Dec. 14 resigned as executive chairman of Steinhoff International Holdings NV, the latest in a series of blows for the embattled company.

Wiese's grip on the furniture, household goods and general merchandise retailer loosened after creditors disposed of 98,447,130 shares in Steinhoff that had been put up as collateral to secure loans.

The underlying value of the stock has crumbled since Dec. 6, when the Stellenbosch, South Africa-based company disclosed that it was probing possible accounting irregularities and CEO Markus Jooste quit.

In a Dec. 15 statement, Steinhoff said a voting pool used to exercise control over Steinhoff had been terminated immediately after the combined voting interest dropped below 30% following disposal of the shares.

Wiese's fortunes are closely entwined with those of Steinhoff. He accumulated a stake of as much as 22% in the company after it acquired his clothing retail business Pepkor in 2014.

The value of his investment in Steinhoff has fallen by about 2 billion since Dec. 5, as a drop of more than 80% in the share price has wiped out more than €10 billion in market capitalization.

In midmorning trading in Frankfurt, Steinhoff's shares were down 4 cents, or 7%, at 53 cents, giving the company a market value of about 2.3 billion. A stake of roughly 20% would be worth about 460 million.

In one of three announcements on Dec. 15, Steinhoff disclosed that lenders sold some of Wiese's shares in the company, which a Dec. 14 report by Reuters said had been used to secure loans.

One statement described an "involuntary sale of shares by funders under security arrangements" of 98,447,130 ordinary shares on Dec. 14 for an average of 0.4935 cents per share. It was unclear if that was intended as 49.35 cents.

A spokesperson for Steinhoff declined to comment on the announcements, and Wiese could not be immediately reached by S&P Global Market Intelligence.

At an average price of 4.935 cents per share, the stake would have realized just 4.86 million. At an average of 49.35 cents per share, the stake would have realized €48.56 million.

Wiese, who had been chairman of Steinhoff since May 2016 and executive chairman since Dec. 6, offered his resignation, which was accepted by the board "to address any possible conflict of interest." Wiese's son, Jacob, made the same offer to the board, which also was accepted.

Heather Sonn, a member of the supervisory board and its independent subcommittee, agreed to become acting chairperson.

The company, which includes the U.S. business Mattress Firm that owns the Sleepy's brand, on Dec. 14 reported that accounting irregularities under investigation by independent auditors extended to its 2016 results, and its consolidated financial statements for the year ended Sept. 30, 2016, would need to be restated.

Steinhoff — which also owns Poundland, Harveys and Bensons for Beds in the U.K., and Conforama in continental Europe — faces questions over its accounting of revenue and profit from joint ventures in Europe. It is involved in courtroom battles in the Netherlands and Germany with a former joint venture partner. A verdict in the Netherlands case is expected by Dec. 22.