Brait Plc, the owner of consumer goods company Premier Group, has backtracked on its plans to list the food manufacturer on the main board of the JSE, citing an unconducive capital markets environment as its main reason.
The investment holding company said in a Sens announcement on Friday that it will instead go the route of selling off its unlisted ordinary shares in Premier to Titan Premier Investments Proprietary Limited and Rand Merchant Bank (RMB).
It revealed the private sale will raise approximately R3.5 billion for the company.
“Premier received a significant amount of investor interest and support for the business… However, the South African capital markets [in particular over the last 48 hours] have not been conducive to supporting a successful IPO,” Brait said.
“Therefore, the Premier board and shareholders have resolved not to proceed with the offer at this time.”
“As noted in the pre-listing statement, in the event of the offer not proceeding, Titan and RMB have agreed, in specified proportions, to acquire unlisted ordinary shares in Premier from Brait for an aggregate consideration of R3.5 billion by way of a private sale of shares, subject to the terms and conditions [including, inter alia, approval from the competition authorities, if applicable] in the share purchase a no greement entered between Titan, RMB, Brait and the Company,” the group added.
When Brait first announced its intentions to list the food producer, it said it would be doing so to pursue Premier’s growth as well as to strengthen the company’s market position across its major categories.
The market did not respond well to news of the cancellation of the much-vaunted listing, with Brait’s share price slumping more than 7% by midday on Friday, to around R3.85 a piece.
Brait’s decision not to proceed with the listing comes as an unexpected turn, with Premier just yesterday (Thursday) sending out invites to the official event to mark its listing on the JSE.
The listing was supposed to take place less than a week from today, on Thursday 8 December.
Premier – which produces well-known South African brands like Blue Ribbon bread, Iwisa maize meal, Snowflake, Lil-Lets and Dove cotton wool products – would have competed with one of Africa’s largest listed food manufacturer Tiger Brands, as well as other listed players like AVI and RCL Foods.