Business mogul Rupert suffers setback as R5bn deal bombs

South Africa’s wealthiest and outspoken businessman Johann Rupert has suffered a festive season setback. This after a deal that involved $300-million (R5.5b-illion) to acquire his online fashion retail business was terminated.

Deal called off

Rupert’s crown jewel, Reichmont, a Swiss company he chairs, announced on Monday that the deal had bombed out. The deal was to sell its online luxury fashion retailer Yoox Net-A-Porter (YNAP) to Farfetch had bombed out.

The news was confirmed in the Stock Exchange News Services. However, news agency Reuters had a different version on the issue. It reported that the luxury goods group said it was pulling out of the deal after South Korean online retail giant Coupang this week announced its intentions to acquire the cash-strapped Farfetch.

Rupert and his family, according to Forbes, are worth R189-billion.

Farfetch’s purchase of a stake in Yoox Net-A-Porter was in October given the green light by European authorities.

“As a result of the contemplated transaction announced by Farfetch on 18 December 2023, the arrangements with Farfetch underpinning the transactions announced in August 2022 cannot complete.

Contributing factors

“Therefore Richemont, Farfetch and Symphony Global, one of the investment vehicles of Mr Mohamed Alabbar, have terminated the agreements for the sale of a majority stake in YNAP to Farfetch and Symphony Global, the adoption of Farfetch Platform Solutions by most Richemont Maisons and YNAP as well as the opening of e-concessions on the Farfetch marketplace by several Richemont Maisons.

Alabbar is a Dubai-based property mogul.

“Following the transaction announced by Farfetch, it is reasonable to expect that the $300-million convertible senior notes issued by Farfetch Limited to Richemont in November 2020 will not be repaid,” said the statement.

“The carrying value of these notes in Richemont’s accounts amounted to €218-million as at 30 November 2023.”

As previously stated, Richemont has no financial obligations towards Farfetch and does not envisage lending or investing into Farfetch. Richemont Maisons continue to operate on their own platforms and have neither adopted FPS nor launched e-concessions on the Farfetch marketplace.

Alternative options

As a result of the termination of the above-mentioned arrangements, Richemont will consider alternative options to pursue the realisation of its Luxury New Retail (LNR) vision. It is confident that its Maisons will benefit from cutting-edge platform technology to best serve the growing omni-channel needs of their discerning clientele.

The Group’s work on re-platforming planning and solution design carried out to date will be of great value to reach that objective. YNAP similarly has not adopted FPS and continues to operate on its own technology. As a result of the termination of the agreements with Farfetch and Symphony Global, Richemont will re-evaluate options for YNAP to best harness its strengths and potential under new stewardship.

Rupert, also the chairperson of Remgro, recently hogged headlines when told shareholders at the company’s annual general meeting that investors avoided countries where people called each other comrades.

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