Mark Lamberti, chairman of Massmart

Lovely lolly for Lamberti - Walmart deal brings in R249m to the top three at Massmart

RETAILER NEWS

Jun 23rd 2011, 09:18

MARK Lamberti, chairman of Massmart, Grant Pattison, the CEO, and Guy Hayward, the CFO, cashed in shares worth R249-m as Walmart consummated its offer for 51% of the shares of Massmart. 

Earlier this week Walmart announced that the R17,5bn deal had been completed.

According to a Sens statement on Wednesday, Lamberti sold shares worth R37,7m, Pattison R145m and Hayward’s family trust R66,4m.

The shares sold were only 51% of the Top Three’s holdings. The numbers are not necessarily capital gains, as each director did pay something for shares they have held, in some cases, for years.

Pattison recently told Alec Hogg on SAFM that directors and staff stood to make R1bn on the Walmart deal.

Nearly 20 Massmart directors – many not well known - made significant capital gains as they cashed in shares and options. Kuseni Dlamini, CEO of Old Mutual cashed in R1,5m. Mrs R Jones cashed R11,2m and Pearl Maphoshe R11,9m. Again these were not capital gains.

Massmart directors, normally very accessible, found themselves tied up in an exco meeting when Moneyweb called and were not able to shed further light on the matter.

Their PR people put out a statement, saying the “proceeds per individual as detailed in the SENS announcement reflect the net proceeds, after settling the original issue price, from which income tax must still be deducted.

“In many cases, these holdings have been accumulated over an extended time period, sometimes as much as ten years, and all shares or options were issued based upon the financial performance of the company.

“The policies and rules of Massmart’s share incentive schemes are consistent with those adopted by other JSE listed companies, and were approved by shareholders when first tabled in 2000 and as updated in 2010 to satisfy revised JSE listing requirements.

It is estimated that a total of R1.1 billion will be paid to management and staff as a consequence of the acquisition by Walmart of a 51% equity share in Massmart.

One of the outcomes of the transaction is that approximately R400m of the gross proceeds will be paid to SARS.

Massmart warned shareholders about the tax implications on their realisations. It said gains on shares held for more than three years would be regarded as capital gains. It advised that rollover relief was available to holders who are required to sell as part of a scheme of arrangement.. Provided that they replace those shares sold with newly purchased Massmart shares within 90 days of the disposalthe capital gain is not taxed. The cost of the new shares is instead reduced by the immediate gain, thus ensuring that the gain is effectively subject to CGT only once the new shares are sold.