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Steinhoff Africa may raise up to $1.4 billion in JSE listing

Sep 05 2017 21:00
Janice Kew, Bloomberg

Johannesburg - Steinhoff Africa is seeking to raise as much as $1.4bn (R18.4bn) in a sale of stock this month, the largest by a South African company in almost two years.

The owner of retailers including pan-African clothing chain Pep will offer about 800 million shares at between R18 and R23 each, it said in a statement on Monday. That amounts to about 23% of the total stock to be listed in Johannesburg, with Amsterdam-based parent Steinhoff International [JSE:SHF] retaining a majority stake.

Naspers [JSE:NPN] was the last South African company to raise more, excluding rights issues, according to data compiled by Bloomberg. The TV and internet business sold $2.5bn worth of shares to institutional investors in December 2015.

Steinhoff, an acquisitive global clothing and furniture retailer, last month said it planned to spin off its Africa operations, while at the same time buying an almost 23% stake in food retailer Shoprite [JSE:SHP]. The move enables billionaire Christo Wiese, South Africa’s fourth-richest person and the biggest shareholder in both companies, to combine his retail assets after a proposed merger fell through earlier this year.

Star, as the new company is known, targets lower-income consumers in sub-Saharan Africa. The business is based on sourcing products at low cost and distributing them through its owned retail brands, including household goods, furniture and building materials. It also provides financial and mobile services.

The shares will start trading on September 20, with an expected minimum market valuation of R62.1bn. Steinhoff’s Frankfurt-listed shares rose 0.3% to €4.07, valuing the company at €17.5bn at the close on Monday.

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