Multinational retail conglomerate Walmart has offered to purchase the remaining shares, excluding treasury shares, in South African retailer Massmart for R6.4bn ($377.6m).

The retail giant has offered R62 for each outstanding Massmart share, a premium of 53% to the closing share price given on 26 August.

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Walmart already owns a 47% stake in Massmart.

Based in Sandton, Massmart sells a range of discretionary items such as apparel, home supplies and seasonal goods.

The company has faced several challenges over the recent years due to Covid-19 related restrictions, civil unrest in KwaZulu-Natal and a challenging trading environment.

It expects Walmart’s potential offer to provide financial and operational support to help it recover from these challenges.

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Massmart chairman Kuseni Dlamini said: “In line with our fiduciary duty, an Independent Board was established to evaluate the terms and conditions of the potential offer from Walmart.

“The Independent Board commissioned a fair and reasonable opinion from an independent expert, who has provided a preliminary report indicating that the terms and conditions are fair and reasonable.

“The Massmart Independent Board, after taking into account the preliminary report of the independent expert, is unanimous in its preliminary opinion, that the terms and conditions of the potential offer are fair and reasonable.”

Massmart recorded R38.1bn in total sales from continuing operations for the 26 weeks ending on 26 June, up by 1.9% from the corresponding period of last year.

During this period, the retailer’s comparable store sales increased by 4.3%, while sales from its online platforms grew by 50.0% year-on-year.

The gross margin from Massmart’s continuing operations dropped by 95 basis points to 19.6%, while its gross merchandise value rose by 108.0% over the same period.

Walmart recently reported revenue of $152.9bn for the second quarter of fiscal 2023 (FY23), which ended on 31 July.