Pepkor Holdings is facing criticism from Aeon Investment Management over its R21 billion ($1.3 billion) deal to merge fintech unit Flash with rival Shop2Shop. Aeon, a top-30 investor, says the transaction should have gone to a shareholder vote given its size and nature. The merger marks a major strategic move into financial services for the retailer.
The deal does not require shareholder approval under Johannesburg Stock Exchange rules because it falls below the threshold for a related-party transaction. Aeon has also raised corporate governance concerns because Pepkor CEO Pieter Erasmus holds a pre-existing indirect stake in Shop2Shop. He will own 13.2% of the combined fintech entity.
Pepkor said Erasmus recused himself from all deliberations regarding the merger.