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Johannesburg - Conglomerate Bidvest Group will next month spin off and separately list its food distribution business, it said on Thursday, in a breakup of the $8.2bn company aimed at boosting its share price.
Bidvest, a sprawling company involved in businesses from shipping to selling household mops, has long acknowledged the need to separate its food business from the rest of the group, saying the unit's value was not reflected in its share price.
Under the breakup plan of the company, valued at R120bn ($8.21bn) at its current share price, shareholders will receive one share in the food distribution business, BidCorp, for each Bidvest share they own.
BidCorp, which supplies food to pubs, restaurants and hotels in Europe, South Africa and Asia, will list on May 30.
"As a separately listed entity, the market will afford the assets of BidCorp a fair and objective valuation," Bidvest said in a statement, adding that the listing would also give BidCorp a fundraising platform to pursue acquisitions.
Shares in Bidvest rose more than 2% to R364.67 by 11:08 GMT, outpacing a slightly higher blue-chip JSE Top-40 index.
After the separation of the food unit, Bidvest would become a southern African diversified industrial company with annual sales of about R90bn and nearly 120 000 employees.
Founder and chief executive Brian Joffe, who has a reputation as one of South Africa's savviest dealmakers, jettisoned plans to list the division in London in 2014, and rejected buyout bids for it three years earlier.
BidCorp, which contributes over half of Bidvest's sales of R200bn, competes with companies such as Sysco Corp of the United States.
