By Elizabeth Antidius Shumbusho | Africa Guardian
South African retailer Spar Group is contemplating an offer to acquire West Pack Lifestyle, which is currently undergoing business rescue. As the country’s second-largest grocer by revenue, Spar has expressed ambitions to diversify beyond the food sector and capture a larger share of the South African market.
West Pack, known for its homeware products, has entered business rescue—a local form of bankruptcy protection. The company is also burdened with significant debt that any potential buyer, including Spar, would need to assume, according to sources familiar with the situation.
In response to inquiries, Spar stated, “While we continuously review opportunities to enhance our offerings and expand our business, any discussions of this nature remain confidential until finalized. Spar is not currently in discussions with West Pack Lifestyle.”
Matuson & Associates, the firm managing West Pack’s rescue process, received several binding offers last week. The administrators are now assessing these offers but have not disclosed details about the bidders due to confidentiality agreements. An overview of the competing bids is expected to be presented to the creditors’ committee and other stakeholders in the second week of September, with the proposed business-rescue plan scheduled for publication on September 23. Creditors will vote on this plan.
Other bidders include private equity firms and some of Spar’s rivals, sources indicated.
Spar, which operates grocery franchises and plans to expand into pet shops and other categories, is optimistic about the new government’s focus on economic growth. This new coalition administration, known as the government of national unity, aims to tackle the high unemployment rate and stimulate economic activity, addressing issues like electricity shortages, logistical delays, and bureaucratic red tape that have impeded growth.
Spar’s CEO, Angelo Swartz, revealed in June that the company aims for its non-food business to make up 30% of sales within the next five years. Meanwhile, Spar’s shares have increased by 8.4% since the beginning of the year.
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