(Adds details on assets owned, valuation, strategy)
FRANKFURT/JOHANNESBURG May 17 South African
retail group Steinhoff on Wednesday said it
was kicking off a process to separately list its African retail
businesses on the Johannesburg stock exchange which it said
would avoid those assets being undervalued.
The proposed listing is the latest move by billionaire
Christo Wiese to bring more of his African retail assets under
one roof to create a shopping giant.
Steinhoff said it would give emerging market investors the
opportunity to independently assess its high profile and fast
growing African brands.
Prior to the listing, Steinhoff will consolidate its African
retail businesses, including Pepkor South Africa and rest of
Africa, JD Group, Unitrans Automotive, Steinbuild, Poco South
Africa and Tekkie Town, under a single holding company which
bankers estimated could be valued at about $6 billion.
The announcement comes after Steinhoff and grocery retailer
Shoprite called off a deal in February to create an
African shopping giant after Wiese and other investors including
state-owned pension fund the Public Investment Corporation (PIC)
could not agree on the value of a share exchange.
Steinhoff, which sells beds and cupboards to less affluent
shoppers, said it would continue to hold a controlling stake in
the African unit following the listing, which will include a
capital raise and be completed in the third quarter of 2017.
"It is the vision of Steinhoff to create a diversified
multi-format listed retail company of significant size and scale
with its roots in Africa," the company said in a statement.
"A separation of Steinhoff's emerging market retail business
and developed market retail business will be a natural
progression for the respective businesses given the divergent
strategic focus in each market."
Steinhoff has operations across Europe, Australasia, the
United States and Africa and has embarked on a series of
acquisitions, the latest being U.S. bedding retailer Mattress
Firm and Britain's Poundland.
Citigroup Global Markets Limited, Investec Bank Limited
, Morgan Stanley & Co International Plc and Rand
Merchant Bank have been appointed to advise on the
Shares in Johannesburg listed Steinhoff closed 1.33 percent
down to 67 rand and fell 2.82 percent in Frankfurt.
(Reporting by Christoph Steitz in Frankfurt and Nqobile Dludla
in Johannesburg; Editing by Arno Schuetze and Elaine Hardcastle)