Steinhoff share price up after listing plan for US mattress firm
Share this article:
STEINHOFF’S shareholders appear more optimistic about the company’s future as its share price rose up to 8 percent to R5.39 on the JSE yesterday, following its announcement to list its American-based subsidiary Mattress Firm on the New York Stock Exchange.
In a statement, the retailer said it had applied to the US Securities and Exchange Commission for an initial public offering as part of a possible listing on the bourse. Steinhoff successfully listed its European discount retailer Pepco in 2021.
"The number of shares to be offered and the price range for the offering have not yet been determined. Mattress Firm intends to apply to list its common stock on the New York Stock Exchange, subject to notice of official issuance," it said.
Steinhoff bought the 90-year-old Mattress Firm in 2016 for $3.8 billion (R59.4bn).
The company is a retailer of mattress brands that include Sealy and Tempur-Pedic. It has about 2 400 stores in the US, and Steinhoff has a 50.1 percent stake in the mattress retailer.
Steinhoff’s investment in Mattress Firm instigated the Viceroy report which questioned Steinhoff’s acquiring Mattress Firm for $64 a share, more than double the closing price on the day the deal was announced.
The Viceroy report, released by former social worker Fraser Perring and colleagues, flagged financial irregularities in Steinhofff International Holdings NV.
Steinhoff is considered an associate rather than a subsidiary in the mattress firm, due to its stake in the firm.
The furniture retailer said in August already that it was considering listing the Mattress Firm to raise cash.
Mattress Firm is struggling with a huge debt burden and filed for Chapter 11 bankruptcy protection in 2018. About 3 600 of its stores were closed, and the firm emerged from bankruptcy soon after.
The embattled Steinhoff group has been making headlines as it faced-off several claims and litigation actions against it.
The company, once celebrated as the success story in South Africa, came close to collapse following an accounting scandal and the resignation of its chief executive Markus Jooste in late 2017.
While Steinhoff has been battling financial woes, it has recently shown signs of moving towards recovery.
In December 2021, its share price increased by more than 20 percent after it announced that its creditors had voted to support Steinhoff’s settlements with the disgruntled former owners of Tekkie Town, and Trevo Capital.
The Tekkie Town settlement with Steinhoff involves the claimants being paid R500 million and receiving 29.5 million Pepkor Holdings shares. Pepkor has about 3.7 million shares in issue.
BUSINESS REPORT ONLINE