Pick n Pay to list Boxer unit in JSE IPO, targeting $451 million

Omokolade Ajayi -
Key Points
  • Pick n Pay targets up to R8 billion ($451.2 million) in Boxer IPO, potentially Africa's largest public offering in 2024.
  • The Boxer IPO follows Pick n Pay’s R4 billion ($225.6 million) rights offer, part of a broader restructuring strategy amid tough market conditions.
  • CEO Sean Summers aims to stabilize operations, cut costs, and reduce trading losses by year-end as Pick n Pay’s shares rebound 33% in 2023.

Pick n Pay, one of South Africa’s largest supermarket chains and partly owned by the billionaire Ackerman family, is preparing to list its low-cost Boxer business on the Johannesburg Stock Exchange (JSE) by the end of the year. 

The IPO could raise up to R8 billion ($451.2 million), potentially the biggest public offering in Africa in 2024.

The move is part of a broader restructuring as Pick n Pay faces a weak consumer market, load shedding, and growing competition. The retailer’s two-step recapitalization plan aims to strengthen its balance sheet, with the Boxer IPO playing a crucial role.

Pick n Pay eyes up to $451.2 million in Boxer IPO

Pick n Pay’s discount chain Boxer, acquired 22 years ago, is central to its growth plans. The retailer said Monday it expects Boxer’s IPO to raise toward the upper end of its R6 billion ($338.2 million) to R8 billion ($451.2 million) target. The offering will include an overallotment option capped at R500 million ($28.2 million). 

Boxer, positioned as a low-cost alternative, has gained traction amid rising living costs. Pick n Pay plans to retain a controlling stake in Boxer even after the listing, solidifying its position in the budget-conscious retail segment.

Boxer IPO follows Pick n Pay’s $225.6 million rights offer

The Boxer IPO comes on the heels of Pick n Pay’s R4 billion ($225.6 million) rights offer, which was 106% oversubscribed, with total subscriptions exceeding R8 billion ($451.2 million).

The strong demand highlights investor confidence in the company’s turnaround strategy under returning CEO Sean Summers.

Summers, who led Pick n Pay from 1996 to 2007, rejoined in October 2023 to drive its recovery. His three-year plan focuses on stabilizing operations, cutting costs, and listing Boxer to raise new capital.

Despite a 45 percent wider after-tax loss of R827.4 million ($47 million) in the first half of 2024, Summers remains optimistic, targeting a 50 percent reduction in trading losses in the core Pick n Pay segment by year-end.

Pick n Pay shares recover as Boxer listing looms

Pick n Pay’s share price, which fell below R25 ($1.3) earlier this year, has rebounded with a 33 percent gain so far in 2023. The retailer's market value is back above $1 billion, signaling rising investor confidence under CEO Sean Summers.

With over 2,000 stores across eight African countries, Pick n Pay is South Africa’s second-largest grocer, trailing Shoprite.

The Ackerman family, holding 25.53 percent of the company (124.7 million shares), is expected to maintain influence as Boxer prepares to list on the JSE, likely in November.

“The worst is behind us,” Summers said in an interview. “There’s still a lot of work ahead, but the foundation is in place.” The Boxer listing is seen as a key step in the company’s recovery, with potential to unlock value and fuel future growth.