Cashbuild’s planned R1 billion-plus acquisition of The Building Company (TBC) from fellow JSE-listed group Pepkor has been officially canned, both companies confirmed in separate Sens statements on Thursday.
The groups have had no option but to terminate the agreement, after the Competition Commission rejected the deal in May.
Cashbuild and Pepkor first announced the deal back in August last year, but the transaction needed to secure approvals from the competition authorities.
“The approval of the transaction by the Competition Commission was a material suspensive condition which was required to be fulfilled in order to implement the transaction,” Cashbuild reiterated in its Sens statement on Thursday morning.
“Consequently, given that not all the suspensive conditions would be met by the long stop date of 16 August 2021 and the parties are unable to agree on an extension to the long stop date, the transaction is regrettably terminated,” home improvement retailer added.
Pepkor issued a similar Sens statement on the matter:
“The approval of the transaction by the competition authorities remains a material outstanding suspensive condition which would not have been fulfilled by the transaction long stop date… As a result of Pepkor and Cashbuild not being able to reach agreement on an extension to the long stop date, the parties have accordingly agreed to terminate the transaction.
“TBC has performed well and has made substantial progress to restructure and consolidate the business while improving its strategic alignment, performance and profitability,” Pepkor said.
“While the disposal of TBC would have enabled Pepkor to streamline its portfolio of businesses in order to focus on its core business of discount and value retail, Pepkor believes this outcome to be in the best interest of value creation for Pepkor shareholders and noteholders.”
The group said that it would “consider future opportunities to unlock value” as these may arise, however, it did not specifically say whether TBC is back on the market.
Pepkor’s share price was up almost 2%, at R21.86 a share around midday on Thursday, following confirmation that the TBC sale has been canned.
However, Cashbuild’s share price was marginally weaker, down around 0.5% and trading around R280.52.