subscribe: Daily Newsletter

 

Sahara breaks silence on failed merger

0 comments

Following the publishing of advertisements to be placed by Simeka BSG in the business press tomorrow morning (5 September), Sahara has made its first official statement about the failed merger between the two companies.

Sahara says that recent press reports with quotes attributed to Simeka BSG CEO, Mohammed Varachia, have painted the company in an unflattering light and have done "severe damage" to its reputation. And while tomorrow's ad campaign may provide some comfort, it adds, the "full impact [of the damage] cannot yet be understood."
"Simeka BSG has put advertisements in the newspapers saying it regrets any embarassment caused to Sahara as this transaction was called off by mutual agreement rather than by any due diligence," says Sahara deputy MD, Gary Naidoo. "This situation arose because there was clear misrepresentation in the press that caused us severe damage.
"As we stated categorically on the date of the announcement, and the post-announcement date, they [Simeka BSG] didn't initiate any due diligence at our offices, so reference to that on their part is complete misrepresentation," Naidoo says. "While we reserve all our options in terms of the damage this may do, we have extricated from them that they will place this advertisement tomorrow.
"The ads have gone off and it seems to be a retraction from Simeka BSG on statements ascribed to their CEO.
"At no stage did Sahara waiver from any of the issues as recorded in the memorandum of understanding (MOU) between Simeka BSG and Sahara," Naidoo says. "They wanted additional commitments outside of the MOU which we weren't willing to offer.
"That is why the proposed merger was called off," he says.
Naidoo wouldn't be drawn on what these "additional commitments" were.
"The important thing now is that both companies need to move forward and continue to do business together," he says. "We look forward to continuing our business relationship with Simeka BSG – we have a lot of business synergies."
The Simeka BSG advertisement – which it is believed will run in Business Day and Business Report – reads as follows:
"Clarification on the withdrawal of the Sahara Holdings (Pty) Ltd transaction
It has come to Simeka BSG Limited’s ("Simeka BSG") attention that there is market speculation and uncertainty with regards to the withdrawal of the cautionary announcement pertaining to the proposed merger with Sahara Holdings (Pty) Ltd ("Sahara").
Simeka BSG would like to clarify that the reason for not proceeding with this proposed merger is due to the parties failing to reach agreement on the fundamental issues relating to the proposed merger and not arising from any due diligence.
We regret any embarrassment that may have been caused to Sahara as a result of this market speculation. Despite the above, we continue to value our relationship with Sahara and remain committed to identifying opportunities and working together in the future.
Simeka Business Solutions Group Limited"