Prominent South African fund manager turns up the heat on Mr Price

Benguela Global Fund Managers is pursuing a reclassification of Mr Price’s controversial acquisition of German-based retailer NKD Group.

The fund manager is arguing that the JSE should aggregate all of Mr Price’s acquisitions since 2021, including its proposed deal with NKD.

By aggregating all these acquisitions, they would be reclassified from Category 2 to Category 1 transactions and, therefore, require shareholder approval.

Benguela sent this request to the JSE, which rejected the fund manager’s petition, with the matter now before the Financial Services Tribunal.

This comes after major Mr Price shareholders have spoken out against the retailer’s plans to acquire NKD and expand into Europe.

On 10 December 2025, Mr Price announced plans to acquire 100% of Pegasus Group Holding, NKD’s retail unit, for €487 million (around R9.66 billion at the time it was announced).

NKD is a German-based value retailer with over 2,000 stores across Central and Eastern Europe.

Mr Price’s acquisition of NKD will mark the retailer’s expansion into a completely new market, with it currently only operating in South Africa and other African countries.

These plans did not go over well with shareholders, with Mr Price’s share price having plunged as much as 12% on the day of the announcement.

Several Mr Price shareholders have spoken out against the acquisition, expressing concerns about the valuation, the feasibility of a European expansion, and other issues.

Among these vocal shareholders was Benguela, which not only penned a letter to Mr Price’s management team but also took its concerns to the JSE.

Category 1

On 22 December 2025, Benguela sent a letter to the JSE, requesting that the exchange reclassify Mr Price’s NKD deal as a Category 1 transaction.

Per the JSE’s Listing Requirements, a transaction is classified into specific categories based on the size of the deal compared to the listed company’s market capitalisation.

For companies like Mr Price that are listed on the Prime Segment of the JSE, a Category 2 transaction is one whose value falls between 5% and 30% of the company’s market cap, with Category 1 deals falling anywhere above 30%.

In Mr Price’s case, the value of its acquisition of NKD – around R9.7 billion at the time it was announced – constitutes less than 30% of the retailer’s market cap, making it a Category 2 transaction.

However, Benguela is looking to change this. The fund manager requested that the JSE reclassify the transaction to Category 1 by aggregating all of Mr Price’s acquisitions since 2021, including the NKD deal.

This is because, according to Benguela, all of Mr Price’s acquisitions since 2021 have moved the retailer away from its principal activities, fundamentally changing the retailer’s risk and operational profile.

In its request to the JSE, which Daily Investor has seen, Benguela said Mr Price has historically been a private-label, mid-value fashion and homeware retailer operating in Southern Africa.

“The group emphasised organic growth within Southern Africa, with negligible international exposure and no significant involvement in premium branding, deep-discount models, or third-party branded athleisure/footwear,” Benguela said.

However, the fund manager argues that several acquisitions Mr Price has made over the past few years have introduced new activities and risks where the retailer had no prior material involvement. These acquisitions include –

• Power Fashion: a deep-value, township-focused retailer targeting low-income customers
• Yuppiechef: A premium retailer selling third-party brands to higher-income customers
• Studio88: A premium, aspirational urbanwear retailer selling international brands

“Since 2021, Mr Price has pursued a series of acquisitions that expand into new retailing domains, fundamentally altering the group’s business profile,” Benguela said.

Appealing to the JSE 

In its request to the JSE, Benguela referred to the JSE’s Listing Requirements, which state that transactions must be aggregated if they are related and occur cumulatively.

In particular, aggregation must occur when acquisitions involve “substantial involvement in a business activity which did not previously form part of the applicant’s principal activities”.

Therefore, Benguela argued that, in Mr Price’s case, its acquisitions since 2021 are interconnected as part of a deliberate expansion strategy.

“Individual announcements may have classified these as Category 2 or smaller, but aggregation reveals a transformative impact, warranting full shareholder scrutiny to assess risks, synergies, and alignment with fiduciary duties,” the fund manager said.

Benguela further pointed out that all these acquisitions taken together represent over R17.6 billion in investments and added more than 3,000 stores to Mr Price’s footprint.

The total value of R17.6 billion represents more than 30% of Mr Price’s market cap, which would constitute a Category 1 transaction and, therefore, require the company to pass an ordinary resolution, i.e. gain shareholder approval, to authorise the deal.

However, the JSE rejected Benguela’s request, and the fund manager is now appealing this decision at the Financial Services Tribunal.

Benguela’s head of research, Victor Seanie, told Daily Investor that the JSE’s rejection was based on the exchange’s view that these acquisitions did not materially differ from Mr Price’s principal activities, with the company remaining an apparel retailer.

The JSE’s director of issuer regulation, Andre Visser, told Daily Investor that the exchange could not share any company-specific information regarding this matter.

However, he could confirm that the JSE received the request from Benguela in December 2025 and provided some general background on the Listings Requirements in respect of aggregation of transactions.

“In terms of the JSE Listings Requirements, only certain transactions that are entered into by a listed company must be aggregated, and this is specifically limited to a 12-month period,” Visser explained. 

“Transactions are generally only aggregated if they are entered into with the same party, or if it involves the acquisition or disposal of interests in one particular asset, or transactions in that 12-month period that led to a substantial involvement in a business activity that did not form part of the company’s principal activities.”

Appealing the decision

Benguela’s head of research, Victor Seanie, told Daily Investor that the fund manager refined its argument for the case in front of the Financial Services Tribunal.

In the fund manager’s appeal, Seanie urged the Financial Services Tribunal to overturn the JSE’s decision and require the aggregation and reclassification of Mr Price’s acquisitions.

His appeal directly responds to the JSE’s rejection, which was based on the argument that, regardless of recent acquisitions, Mr Price remains an apparel retailer.

Seanie claims that, while Mr Price may still sell clothing, the economic substance of its business has changed materially on several fronts, including geography, customer base, and risk profile.

He argued that the acquisitions collectively amount to substantial involvement in new business activities, which should trigger aggregation.

He points out that NKD is not an isolated deal but the culmination of a multi-year strategy that has permanently altered Mr Price’s risk-return profile.

“If they’re getting into something that’s different from what you initially bought into and partake in those activities, you’re changing the character of the business, the strategy of the business, the risk profile of the business,” Seanie told Daily Investor. 

He further claimed that Mr Price’s overall growth strategy has changed over the past few years, which has also altered the retailer’s risk profile from a shareholder’s perspective. 

“Growing organically versus growing through acquisition, that changes a business’s profile, because if you go and buy businesses that you don’t know as well as your existing business, that’s riskier,” he said.

In addition, he argued that the JSE’s rejection of Benguela’s request sets a dangerous precedent, as it could, in theory, allow companies to incrementally but fundamentally change their business without shareholder input.

He pointed to local retailers Steinhoff and SPAR as cases where “creeping transformations” took place without aggregation or shareholder insight, which ultimately led to operational and financial failures.

More shareholders speak out

Daily Investor reached out to 36ONE Asset Management, another Mr Price shareholder that has been vocal with its concerns about the NKD acquisition, for comment on this development.

The asset manager had not heard about Benguela’s request to the JSE, but said it continues to believe that the transaction represents a strategic pivot and that additional capital will likely be required to recapitalise NKD. 

“So, we believe the transaction should have been put to a shareholder vote,” it said. 

“Unfortunately, the board and management have taken the transaction so far down the line, without canvassing even their largest shareholders, it would be difficult to reverse.” 

However, 36ONE said that, given the market cap loss far exceeds the transaction value, “we don’t see any downside to reclassifying the transaction”.

36ONE sent a letter to Mr Price’s management on 11 December 2025 outlining their concerns with the transaction.

In this letter, 36ONE criticised Mr Price’s board for the handling of the announcement and an apparent lack of shareholder engagement related to this acquisition.

In its announcement of the proposed acquisition, Mr Price explained that the deal constitutes a Category 2 transaction and, therefore, does not require shareholder approval.

However, 36ONE claimed that the board is using this technicality to avoid meaningful consultation, despite clear shareholder disapproval, as shown by the share price plunge following the announcement.

“While the board retains decision-making authority over a Category 2 transaction, it is important not to dismiss such a clear signal from the market and from the very shareholders whose capital is being deployed,” 36ONE co-founder Cy Jacobs said in the letter. 

“In my view, it would be a mistake to interpret the absence of a formal shareholder vote requirement as the absence of a need for meaningful shareholder consultation.”

Daily Investor reached out to Mr Price for comment regarding Benguela’s request. Mr Price said it is aware that, following the JSE’s response to Benguela, the transaction has been appropriately categorised, “with which we agree”.

“The matter is now before the Tribunal, and we will make written submissions as part of the formal process,” the company said.

“We have signed the acquisition agreements and are contractually obliged to comply with the terms thereof.”