Billionaire businessman Christo Wiese has emerged as a cornerstone investor in the mooted public listing of Premier, the country’s largest unlisted essential foods business.
The JSE, which has been experiencing a spate of companies delisting from the bourse, will soon welcome a new member in the form of Premier, which currently has an indirect listing through its parent company Brait, which has a secondary listing on the JSE.
Brait announced on Monday that Wiese, who is also a significant shareholder in the company through his investment vehicle Titan Premier Investments, has made an irrevocable commitment to purchase 36.2% of the offer shares in Premier.
The initial public offering (IPO) is expected in December with Premier set to have a value of just under R9-billion on its first day of trade on the JSE.
Titan Premier Investments has Wiese, his son Jacob and Marco van Zyl Wentzel as directors.
“As a result of its cornerstone investment and Brait’s cession of look through voting rights, it is expected that Titan, subject to obtaining regulatory approval, will hold 36% of the voting rights in Premier at IPO [subject to its underwriting commitment not being called upon],” Brait said.
A cornerstone investor is an investor who commits to taking a fixed value of shares, often a sizeable amount, in an IPO at an early stage in the IPO process and before the main investor roadshow and bookbuilding commence, according to LexisNexis.
Premier owns some of the country’s iconic brands including Snowflake, Blue Ribbon, Iwisa, Tops, Lil-lets, and Dove cotton wool, among other brands. The company, which also has a presence in eSwatini, hauled in R8.7-billion in revenues in the six months to September, up 24%.
According to DataOrbis, Premier had about 24% market share in bread as of August, 32% market share in flour, 20% market share in maize, and 18% market share in total sugar-based confectionery.
It also has an 18% market share in feminine care in South Africa and holds the market leading position in the Western Cape and the second-largest market share in KwaZulu-Natal and the Eastern Cape.
Kobus Gertenbach, CEO of Premier, said: “The decision to embark upon a JSE listing is an important and exciting step in Premier’s growth story. The transition into the listed environment is expected to support Premier’s efforts to drive its organic and acquisitive growth strategy and strengthen its market position across all business areas.
“The executive management team will remain materially invested in Premier, thereby ensuring strong alignment between existing and new shareholders.”
Gertenbach added that one of the company’s key strengths is its route to market capability, using a fleet of 1 059 (912 owned and 147 third party) bakery vehicles delivering bread to over 45 000 customers, 363 days a year.
Wiese has long been regarded as the country’s richest man until the spectacular crash of Steinhoff in 2017, following years of fraudulent conduct by some of its executives, including its former CEO Markus Jooste.
The scandal wiped off nearly R60-billion of Wiese’s wealth.
However, the 81-year-old’s 10.7% stake in Shoprite means he still has significant wealth. Shoprite, the country’s leading grocery retailer, is worth just under R140-billion on the JSE.
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