Brait backtracks listing of Premier Foods amid market volatility, opts for private sale of shares

SOUTH AFRICA – Brait Plc, the owner of consumer goods company Premier Group, has opted not 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, which owns 97% of Premier, whose brands include Iwisa maize, Snowflake flour and Mr Sweet, announced plans for a potential listing in November, which was to occur on Thursday, 8 December 2022.

“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 Initial Public Offering.

“Therefore, the Premier board and shareholders have resolved not to proceed with the offer at this time,” Brait said in a statement.

Under the initial plan, Brait was eyeing to raise gross proceeds of up to ZAR3.7 billion (US$215m).

This, together with its share of a November 2022 distribution of R950 million (US$55.2m), was expected to see Brait receiving gross proceeds of up to R4.7 billion (US$273m) upon the successful listing of Premier.

The capital raised from the unbundling was anticipated to assist in addressing Brait’s future liquidity requirements.

The investment company has however noted that with the change of plans, 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 (US$199.5m) for the company, subject to the terms and conditions including approval from the competition authorities, if applicable in the share purchase agreement entered between the parties.

“The Premier Board, management and shareholders remain excited about the opportunity to execute Premier’s growth strategy under private ownership,” the group added.

In June, giant Coca-Cola Beverages Africa indicated it was delaying its plans to list on the local bourse, saying a rescheduled listing would depend on improved market conditions.

The Coca-Cola company highlighted it will continue to evaluate the macroeconomic conditions in a bid to decide future timing for an IPO in 2023.

The decision to delay the listing comes at a time of falling global equity investor sentiment as market volatility fuelled by the war in Ukraine, Covid-19 lockdowns in China, rising interest rates, a darkening economic growth outlook and roaring inflation, all weigh on risk appetite.

The planned IPO by Coca-Cola was first revealed in April 2021, with the shares to be listed in Amsterdam and Johannesburg.

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