Steinhoff International will list its Pepco Group subsidiary on the Warsaw Stock Exchange later this month in a move that could raise as much as €1-billion (R17.3-billion). Its shares rose as much as 8.4% yesterday.
The retail group is aiming for a price range of between €8.35 and €10.11 for Pepco’s stock when it lists on 26 May, valuing the European discount retailer at between €4.8-billion and €5.8-billion (R83-billion to R100-billion). Steinhoff owns 98.8% of Pepco and plans to sell up to 101.3 million of its shares, representing 17.5% of Pepco’s total issued share capital. The stock will be offered to retail and institutional investors in Poland and other institutions investors in selected other countries. However, an over-allotment option could increase the shares on offer by a maximum of 15.4 million.
The initial public offering of Pepco shares will allow it to repay expensive debt as it battles to return its business to sustainability following accounting irregularities uncovered in 2017 that nearly brought it to its knees.
Pepco, previously called Pepkor Europe, is a pan-European discount variety retailer. It claims to serve over 50 million customers a month from its more than 3,200 stores in 16 countries across Europe. It owns the PEPCO and Dealz brands in Europe and the Poundland brand in the UK and claims to serve over 50 million customers a month. It is one of the biggest contributors to Steinhoff’s earnings.
Pepco said the publication of the prospectus today marked a further important step towards Pepco listing on the Warsaw Stock Exchange.
We operate in the highly attractive discount retail sector and remain confident about the significant growth opportunity we see for each of our much-loved retail brands,” CEO Andy Bond said. “We have a proven track record of delivering growth and look forward to presenting our compelling investment case to both institutional investors, as well as retail investors in Poland.”