Investment company Brait, whose largest shareholder is Christo Wiese, has announced plans to spin off and separately list Premier Group, in an initial public offering (IPO) that would value the fast-moving consumer goods group at as much as R8.6-billion.
Brait, which currently holds 99% of Premier, would price the shares at between R53.82 and R67.04 per offer share, an equity valuation of between R6.9-billion and R8.9-billion, and representing between a 10% and 28% discount to Brait's latest valuation of the firm.
Premier is a fast-moving consumer goods group with roots dating back to 1820, and its brands include Blue Ribbon bread, Snowflake flour, Iwisa maize meal, Super C sweets, and Lil-lets SA, which produces feminine hygiene products.
Along with recent dividends, the move would result in about a R4.7-billion cash inflow for Brait, which is still reeling from the effects of Covid-19, which hit gym chain Virgin Active hard. Currently, Premier makes up about 54% of Brait's R19-billion in total assets by Virgin Active at 41%.
Wiese's Titan Cornerstone Investments has undertaken to purchase 36.2% of the listing shares, while Rand Merchant Bank has agreed to acquire 2.4%. Both have also agreed to underwrite the offer to the tune of R3.5-billion, with Titan representing R3-billion of this amount. "The underwrite significantly de-risks the IPO and demonstrates Titan's confidence in the Premier business," said Brait.
"The decision to embark upon a JSE listing is an important and exciting step in Premier's growth story," Premier CEO Kobus Gertenbach said in a statement.
"The transition into the listed environment is expected to support Premier's efforts to drive its organic and acquisitive growth strategy and strengthen its market position across all business areas. The executive management team will remain materially invested in Premier, thereby ensuring strong alignment between existing and new shareholders," he said.
In morning trade on Monday, shares of Brait, which also released its half-year results earlier, were trading 7.02% higher at R4.88, valuing the group at R6.02-billion.