Pick n Pay Simplifies Shareholding Structure to Boost Free Float

  • Founding Ackerman family to retain control of food retailer
  • South African company to be more attractive to investors: CEO

Pick n Pay Stores Ltd. plans to simplify its shareholding structure to boost the free float and increase demand for shares in the South African supermarket chain.

The holding company controlled by the retailer’s founding Ackerman family will spin off its 53 percent majority stake in Pick n Pay, the Cape Town-based company said in a statement on Tuesday. The Ackermans will retain control of Pick n Pay’s shares and keep majority voting rights through an issue of a new class of unlisted stock.

“Unbundling the pyramid will streamline the Pick n Pay Group into one listed entity, with benefits for the company and potentially for all shareholders,” Chairman Gareth Ackerman said. “Over time, the simpler structure should improve Pick n Pay Stores’ appeal to investors, which could in turn help our long-term growth strategy.”

The shift away from the so-called “pyramid structure”, which was introduced in 1981 by the Ackerman family to prevent a hostile takeover, will increase the free float in the stock to about 73 percent from 46 percent, Chief Executive Officer Richard Brasher said. The new structure will increase the shares’ weighting in equity indexes and improve liquidity, Pick n Pay said.

Pick n Pay shares declined 2.3 percent to 68.42 rand at 10:22 a.m. in Johannesburg, valuing the company at 33.4 billion rand. The stock of Pick n Pay Holdings Ltd. surged 14 percent, the biggest jump since October 1998, to 32.29 rand.

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