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Cape Town - Minority shareholders at Pick n Pay on Monday voted in favour of changing the ownership structure to increase its free float in a bid to boost demand for its stock.
Minority shareholders at the general meeting, held at company's Cape Town-based headquarters, voted on average 82.5% in favour of the resolutions, officials said.
Shares in Pick n Pay Holdings, which holds a controlling stake, hit an all-time high when the changes were proposed last month. On Monday afternoon the shares hit a new 52-week high, changing hands 2.55% firmer on R80.49.
The pyramid structure, which takes the form of a dual listing on the JSE, was introduced in 1981 by the Ackerman family to prevent a hostile takeover and ensuring that the founding values of the business remain in place through family control of the company. The Ackermans will retain control in the new structure.
The Ackerman family owns more than 50% of shares in Pick n Pay Holdings [JSE:PWK], which in turn owns more than 50% of shares in Pick n Pay Stores [JSE:PIK].
Pick n Pay chairperson Gareth Ackerman said his family has for some time been looking to unbundle the pyramid in a way which benefits the company and all its shareholders.
“Unbundling the pyramid will streamline the Pick n Pay Group into one listed entity, with benefits for the company and potentially for all shareholders. Over time, the simpler structure should improve Pick n Pay Stores’ appeal to investors, which could in turn help our long-term growth strategy."
In essence, the proposal that was passed will:
- collapse the pyramid by unbundling all shares in Holdings, with Holdings shareholders receiving shares in Stores on a pro rata basis;
- mean that all shareholders in Pick n Pay will hold their shares in a single Stores listing. Holdings would delist from the JSE, and would be wound up;
- allocate to the Ackerman family a new class of unlisted voting shares in Stores (“B Shares”). This will ensure that the Ackerman family continues to have a controlling interest in the company.
CEO Richard Brasher said he sees the move as the next step in the group's modernisation programme.
“It will modernise and simplify Pick n Pay by creating a single, unified structure. It will increase the free float in Stores from about 46% to around 73%. This should over time make the company more attractive to investors. By unbundling Holdings shares into Stores, it will also eliminate the current discount between the two shares."
Pick n Pay founder Raymond Ackerman said the family intends to stay invested and involved in Pick n Pay.
