Pick n Pay to list Boxer unit in Africa’s biggest IPO this year
Pick n Pay Stores said it will list its low-cost Boxer business on the Johannesburg bourse by the end of the year and that the South African grocer will raise as much as R8-billion in the process, making it the continent’s biggest offering this year.
Amid a revamp of South Africa’s third-largest grocer by revenue, Pick n Pay expects the offer to raise toward “the upper end” of a previously guided range of R6-billion to R8-billion, it said in a statement Monday. It will include an overallotment option that likely won’t exceed R500-million.
Sales at its low-cost Boxer business climbed 12% in the six months through Aug. 25, which will help the struggling retailer woo investors. CEO Sean Summers is “quietly confident” that the Cape Town-based company will reduce trading losses in its Pick n Pay segment by as much as 50% for the full year, he said in a separate statement.
Summers, who was rehired as CEO last year, has a three-year turnaround plan which includes selling shares in its Boxer unit. The company’s loss after tax widened 45% to 827.4 million rand in the first half from a year earlier.
“The Boxer IPO remains pivotal to our strategy, and their remarkable performance continues to prove it is an exceptional business,” he said. “We are excited to see it thrive as a listed entity.” said Summers. Pick n Pay will retain a controlling interest in Boxer.
The shares have climbed 34% this year, making them the best performers on the six-member FTSE/JSE Personal Care, Drug and Grocery Stores Index, and are almost double the next best stock on the gauge.
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