JOHANNESBURG, Nov 25 (Reuters) – South African grocery retailer Pick n Pay has successfully raised 8.5 billion rand ($471 million) by selling a 34.4% stake in its discount chain, Boxer, at 54 rand per share during its initial public offering (IPO), the company announced on Monday.
This IPO marks the second and final phase of CEO Sean Summers’ recapitalization strategy aimed at generating essential funds to reduce Pick n Pay Group’s debt and address challenges within its struggling core supermarket business. Previously, the company raised 4 billion rand through a rights issue.
Boxer CEO Marek Masojada expressed gratitude for the overwhelming support from both local and international investors, noting that the order book was significantly oversubscribed at the upper end of the offer price range. The IPO’s offer price range was set between 42 rand and 54 rand, with a total of 157.4 million shares sold.
With a total of 457,407,408 shares outstanding, the offer price suggests a market capitalization of 24.7 billion rand, assuming the overallotment option is fully exercised. This option allows underwriters to sell additional shares to stabilize the stock price, with 9,259,259 overallotment shares valued at approximately 500 million rand, although their sale is not guaranteed.
As the third-largest grocery retailer in South Africa by market capitalization, Pick n Pay will retain a 65.6% stake in Boxer. Shares of Boxer are set to begin trading on the main board of the Johannesburg Stock Exchange on November 28, with a secondary listing on the local alternative market.
Founded in 1977 in towns like Nquthu and Ulundi in KwaZulu-Natal, Boxer has expanded to 489 stores across South Africa and Eswatini, capturing roughly 68% of the discount grocery retail market.
($1 = 18.0602 rand).
(Reporting by Nqobile Dludla; Editing by Tom Hogue and Kim Coghill, Kirsten Donovan)
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