• The IPO of Boxer closed with R8.5 billion being made by Pick n Pay.
• The stock is expected to go live on the JSE on Thursday.
• The money made from this IPO will be invested back into the PnP supermarket business while also servicing the retailer’s debt.

One of the few shining stars in Pick n Pay’s roster is Boxer. In its most recent earnings report, Pick n Pay (PnP) reported that the brand’s trading profit increased to R801.4 million with a 12 percent spurt in sales.

On Friday, PnP launched its Boxer initial public offering (IPO) and it made a cool R8.5 billion trading shares at between R42 and R54 a pop. The Boxer or BOX stock will start trading on the JSE index on the Settlement Date which is expected to be Thursday 28th November. The stock will also be listed on A2X.

“Local and international investors have demonstrated extraordinary support for the Company’s equity story and growth trajectory, with the order book being multiple times oversubscribed at the top end of the Offer Price Range. The Board of Directors of Boxer is confident that the initial shareholder register strikes a balance between local and international shareholders, long-term investors and liquidity providers, including through the participation of local stockbrokers,” the chief executive officer of Boxer, Marek Masojada said in a statement.

“The JSE listing will give Boxer a platform from which to pursue its strategy, as it will elevate the Boxer brand, enhance its access to capital to sustain growth, instil public transparency and market discipline and enhance its profile with key stakeholders,” the CEO added.

Assuming its overallotment option is fully exercised, PnP reckons the implied market capitalisation is around R27.7 billion based on a total of 457 million shares. PnP will still control a 65.6 percent stake in the Boxer brand.

The listing of Boxer on the JSE is the second in a two-step process PnP is conducting to right the sinking ship. With the amount of interest this listing drew, it’s clear that the market is interested in the retailer and it could be a boon for investors over time. Proceeds from the listing will be used to service PnP’s debt and reinvest funds into the core PnP supermarket business.

We’re curious to find out if this plan works out for PnP, especially as it faces increasing competition from other grocery store operations. There is quite clearly a need for a retailer such as Boxer given the financial situation of most South Africans and as such, there will always be a need for a discount retailer like Boxer.

Now all PnP needs to do is figure out how to compete with Checkers because right now, that retailer is dominating not just the market but the ecommerce market as well.