Breaking news regarding Steinhoff's financial irregularities here!
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Long has there been a group called the "Stellenbosch Mafia" and they include names such as Christo Wiese (Shoprite, Pepkor), Johan Rupert (Remgro and Reinet), Jannie Mouton (PSG), Markus Jooste (Steinhoff). G.T. Ferreira and Paul Harris (FirstRand and Rand Merchant Bank) and Koos Bekker (Naspers). Now it's long been said these men control most of the capital in South Africa. While there might be a case to say that, we not interested in the influence, but we are more interested in what Steinhoff is planning on doing with the large PSGGroup (PSG) shares.
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So what on earth is Steinhoff doing with PSG
Steinhoff, controlled by Jooste, acquired Christo Wiese's 20% in PSG in 2011. At the time it might have seemed like an add acquisition. But acquisition of all the share capital in Joshua Door Group (JDG) hinted at what Steinhoff might possibly be planning with their PSG stake. So believe the sole purpose of Steinhof's acquisition of the stake in PSG was to stop a hostile take-over bid by ABSA of PSG group. So Jooste bought the stake in order to protect his friend, Jannie Mouton's company from being bought out by ABSA. But it seems this was not the only reason.
Commentators started thinking that Steinhoff, now fully in charge of JDG and significant shareholder in PSG (who owns 30.7% of Capitec), will start putting pressure on PSG to get Capitec to offer loans in JDG stores to clients. (Similar to what African Bank did with Ellerines). But the total collapse of African Bank due to bad debts at Ellerines put the brakes on that idea for a very long time.
So while the African Bank/Ellerines saga played out, Steinhoff has quietly increased it's stake in PSG. According to Steinhoffs website they now own 27% of PSG. Which implies that Steinhoff via 27% shareholding in PSG, now owns 8.3% of Capitec Bank. Nothing is stopping Steinhoff from pressuring PSG/Capitec, into offering loans at their furniture outlets (assuming better loan approval criteria).
In addition to this Steinhoff acquired Pepkor, owners of PEP, who now offers loans via Capfin. Readers will note a huge part of Pepkor was owned by Christo Wiese mentioned above. Is there a deal coming between Capfin and Capitec? Dont bet against this. With Moutons/Jooste anything is possible.
In addition to this Steinhoff acquired Pepkor, owners of PEP, who now offers loans via Capfin. Readers will note a huge part of Pepkor was owned by Christo Wiese mentioned above. Is there a deal coming between Capfin and Capitec? Dont bet against this. With Moutons/Jooste anything is possible.
We still think that Steinhoff will continue to increase their indirect holding in Capitec, as the only part missing of the vertical integration strategy in the furniture and retail sector is the financing of furniture within their furniture shops (and perhaps push for a deal between Capitec and Capfin) to clear the path for Capitec to offer loans to not only PEP clients but their other furniture outlets such as JD Group stores.