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Star listing
Valued Contributor

Star listing

pep.jpg

 

Star is coming with a 270-page listing document and PPT wrth reading.

 

Some important points;

  • JSE code: SRR
  • Listing 20 September 2017.
  • Current Steinhoff shareholders do NOT receive Star shares (you’ll have to buy them on market).
  • Listing price likely to be low R20’s on PE of around 20x and DY of some 2.2%.
  • Brands are; Pepcor Africa, Poco, Russels, Flash, Ackermans, Bradlows, Rochester, Buco, Timbercity, The Tile House, Incredible Connection, HiFi Corp, Dunns, John Craig, Refinery, Shoe City and Tekkie Town. 
  • Market cap including Shoprite* stake should be over R100billion and they’ll get into Top40 maybe as soon as December update.
  • Steinhoff will own 51% of star hence Steinhoff shareholders will be diluted as they currently have 100%.
  • This dilution is offset by cash received by Steinhoff for the missing Star holdings.
  • Star owns 50.6% of Shoprite so it will be consolidated into their results and I expect them to make an offer for the remaining holdings of Shoprite in time.

 I am not going to be buying Star. I like Pep but less so the furniture brands and never been able to get a grip on the management. That said I do expect them to offer Star shares for Shoprite at some point as they look to take 100% of Shoprite. I will cross that bridge when it arrives.

 

Simon

 

Writer holds shares on Shoprite

7 Comments
Occasional Contributor

Hi Simon, dont see where the cash in lieu of the dilution is coming from. My back of matchbox calcs show the following: Star will list 3,45 billion shares. Based on their expected EBIT at 30 Sept R4,855 bil.(incl.the 2 new acquisitions) and working on PE of 15 I calculate est. share price at R21.15 (which is more or less in the middle of their guidance), therefore market cap will be in the region of R72,98 billion. Steinhoff shareholders giving up 49% therefore R35,754 billion. If SHP deal goes ahead, I assume some of the 3,45 billion issued shares will be used to pay for this, SNH will get 23,1% economic interest and based on yesterday market cap for SHP, Steinhoff will get R29,72 billion which leaves a shorfall to SNH shareholders of approx. R6 billion (49%SNH-23,1%SHP). I am assuming this balnce goes to Lancaster/Titan/Thibault for the Voting control? 

This morning we get a notice from SBG Sec that we can now also participate in SRR at R10000 a pop. What happened? Initially only private "invited" investors at min R1 mil could participate? In the listing statement 2,7 billion shares will be listed +750 thou to private investors. If SHP deal falls flat, who buys these 2,7 billion shares or do they go to SNH? If so what does that do for SRR liquidity?

Phew, I agree with you. This is far too complicated for me as well and also given the German tax issues I have sold my SNH and staying away from SRR at least until everything is a little clearer. 

Valued Contributor

SNH is passing on debt and selling shares for cash that will generate the rest of the interest for SNH ..

OST is able to offer as they've been invited and will bulk up the application for the min R1m, so us samller cliets can get involved if we want

Occasional Contributor

Gotcha. Thanks

Valued Contributor

shares laced at 2050c raising R15billion

coligny
N/A

So what do we expect to happen to Steinhoff shares at the listing of Star?  Since we don't get STAR shares, or cash, does Steinhoff share price stay the same?

 

This is above my head.  Some say it will fall by the R20 value of Star, but this does not make sense either.

captain101
N/A

Hi Simon,

What does interest me this the fact that STAR board has zero females. Last in knew the JSE has requirements regarding this "issue". In fact Steinhoff also has females on board level other than "HR". This "boys club" is not within legalities and nees to be addressed.

Contributor

so Star had a good listing. Up almost 10%. However the Dutch court decision is  tomorrow  to decide whether the application to investigate the irregularities of steinhoffs books . Coincidence that this has been rushed or what?

would you rather hold Steinhoff or Star or both?