A keenly-awaited listing – that of iconic South African food and consumer group producer Premier Groups – has been cancelled due to the volatile capital markets that were spooked about the uncertainty surrounding the future of President Cyril Ramaphosa.
The share price of Premier’s parent company, the Luxembourg and JSE-listed investment group Brait, plunged 7.18% on Friday morning once the market had digested the news of the cancelled plans to list.
On November 22 this year, Premier had published a pre-listing statement detailing a private placement of up to 65.03 million ordinary shares and the subsequent admission to listing Premier on the Main Board of the JSE on December 8, 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 IPO. Therefore, the Premier board and shareholders have resolved not to proceed with the offer at this time,” Brait said in a statement on Friday.
The JSE had a strong month in November, with, for instance, the JSE’s Top 40 Index gaining 14.2% and by 17% in US dollar terms, while the JSE All Share Index was up 11.3% over the month.
But many JSE’s shares fell hard on December 1, particularly the banks, after it became apparent President Ramaphosa had a case to answer regarding the theft of hundreds of thousands of his dollars that was stashed in a lounge suite on his farm.
Finance Minister Enoch Godongwana said on a Bloomberg television broadcast online Friday that he believed there was only a 10% chance that Ramaphosa would resign, but if he did, “we will find a way of managing it”.
Because the listing plans did not proceed, Titan, an investment company headed by well-known businessman Christo Wiese, and RMB, both underwriters of the IPO, had agreed to acquire the unlisted ordinary shares in Premier from Brait for R3.5 billion by way of a private sale of shares, subject to the terms of a share purchase agreement entered between Titan, RMB, Brait and Premier.
The R3.5bn represented the lower end of the envisaged share price range that Premier would have traded at, had it listed.
“The Premier board, management and shareholders remain excited about the opportunity to execute Premier’s growth strategy under private ownership,” the parties said in a statement Friday.