South Africa's Pick n Pay raises $471 mln in Boxer IPO
Shoppers stand at a Pick n Pay store at the Dobson Point Shopping Centre, in Soweto, South Africa, March 19, 2024. REUTERS/Siphiwe Sibeko/File Photo
JOHANNESBURG, Nov 25 (Reuters) – South African grocery retailer Pick n Pay raised 8.5 billion rand ($471 million) after selling a 34.4% stake in its discount chain Boxer at 54 rand per share to institutional investors in an initial public offering, it said on Monday.
The IPO is the second and final step of CEO Sean Summers’ two-step recapitalisation plan to raise much needed cash to lower Pick n Pay Group debt and fix its loss-making core Pick n Pay supermarkets business. It has already raised 4 billion rand through a rights issue.
“Local and international investors have demonstrated extraordinary support for (Boxer’s) equity story and growth trajectory, with the order book being multiple times oversubscribed at the top end of the offer price range,” Boxer CEO Marek Masojada said.
The offer price range was between 42 rand and 54 rand. The retailer sold 157.4 million shares.
Based on a total of 457,407,408 shares in issue, assuming the overallotment option is exercised in full, the offer price implies a market capitalisation of 24.7 billion rand, the retailer said.
An overallotment option grants the underwriter the right to sell more shares to provide price stability. In this case there are 9,259,259 overallotment shares representing about 500 million rand although the retailer said there was no guarantee they would be sold.
Pick n Pay, the country’s third biggest grocery retailer by market cap, will retain a 65.6% stake in Boxer.
Boxer’s shares are scheduled to start trading on the main board of Johannesburg’s stock exchange on Nov. 28, with a secondary listing on the local alternative market.
Founded in 1977 as a small operator in towns like Nquthu and Ulundi in KwaZulu-Natal, Boxer has now grown to 489 stores across the country and Eswatini, with roughly a 68% market share of the discount grocery retail market.
($1 = 18.0602 rand)
(Reporting by Nqobile Dludla; Editing by Tom Hogue and Kim Coghill, Kirsten Donovan)
