TFG offers to acquire selected Jet stores and assets

July 13, 2020 - South Africa

TFG, one of the foremost independent chain-store groups in South Africa, has submitted a conditional offer to acquire certain commercially viable stores and selected assets of Jet, a division of Edcon Limited for a cash purchase consideration of R480 million ($28.65 million). Edcon is currently in business rescue in terms of the Companies Act.

"Edcon’s business rescue practitioners have accepted the terms of TFG’s conditional offer. TFG has been granted exclusivity to negotiate and finalise the terms and conclude the proposed transaction," TFG said in a statement.

"Jet is a leading Southern African retailer (both in terms of brand recognition and market share) and would provide TFG with a strategically important expansion into the value segment of the Southern African retail apparel market," TFG said.

The proposed transaction enables TFG to acquire selected parts of the JET business, a unique opportunity which previously was not possible and is expected to give TFG significant scale at an attractive price. The transaction construct provides TFG with structural risk mitigants, and establishes a value retail pillar for the TFG business that would be costly and difficult to replicate organically, the company added.

The proposed transaction will also include the transfer of selected key executives and staff of Jet to ensure sufficient management capacity and continuity to deliver on the current turnaround plan for Jet and discussions are well advanced in terms of a proposed transition plan, the statement said.

TFG’s conditional offer envisages the acquisition of the Jet brand; the assumption of a minimum of 371 commercially viable Jet stores, including a distribution centre located in Durban, South Africa and certain stores in Botswana, Lesotho, Namibia and Eswatini; the acquisition of the associated property, plant and equipment for the commercially viable stores and the Durban distribution centre; the acquisition of the rights in and to the Jet Club; and all existing stock holdings with a minimum stock value of no less than R800 million.