JOHANNESBURG - Steinhoff International Holdings NV gave more details about the planned listing of its sub-Saharan African retail assets in Johannesburg, showing that profit has been growing at the low-cost clothing and furniture specialist with more than R51bn ($3.9Bn) of annual sales.
The owner of the Pep and JD Group chains will carry out a private placement of shares to selected investors alongside the sale of stock to the public by the end of September,
Steinhoff said in a statement on Wednesday. The new entity, called Steinhoff Africa Retail Ltd., will be based in the South African town of Stellenbosch and have about 4,800 stores across the continent.
The move represents the latest stage of Steinhoff’s three- year transformation from a South African furniture retailer with some European assets into a global operator. The company kicked off an acquisition spree with the $5.7bn purchase of pan-African Pepkor Holdings Pty Ltd. in 2014, and has since moved its primary listing to Frankfurt and completed a string of further deals in Europe, the U.K. and the U.S. Steinhoff forecast Wednesday that pro-forma adjusted operating profit at the unit, to be known as STAR, will increase 25 percent to 6.06 billion rand in the 12 months through September. The company announced the spinoff plans in May.
Shares of Steinhoff rose 2.2% to €4.30 as of 10:56 a.m. in Frankfurt. Last week, Steinhoff African Retail agreed to buy a 22.7% stake in Shoprite Holdings Ltd.,Africa’s largest retailer, as part of the planned listing. That enables South African billionaire Christo Wiese, who chairs and is the largest shareholder in both Steinhoff and Shoprite, to combine his interests in the retail giants. A proposed full merger was called off in February.
Citigroup Inc., Investec Ltd., Morgan Stanley and FirstRand Ltd.’s RMB unit are the global coordinators of the STAR listing.