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JOHANNESBURG, Nov 14 (Reuters) - South African food producer Premier Group intends to make its stock market debut on the local exchange at a proposed price range of 53.82-67.04 rand per share, valuing the company at up to 8.6 billion rand ($497 million), parent firm Brait Plc said on Monday.
By 0900 GMT, shares in Brait were up 6.80% at 4.87 rand.
“The transition into the listed environment is expected to support Premier’s efforts to drive its organic and acquisitive growth strategy and strengthen its market position across all business areas,” said Kobus Gertenbach, Premier’s CEO.
As part of the listing, Brait will raise up to 3.7 billion rand from selling Premier’s shares to investors at that proposed price range, which equates to an equity valuation of between 6.9 billion rand and 8.6 billion rand, Brait said.
The investment group, whose biggest shareholder is billionaire Christo Wiese, added that the proposed price range represents a 10% to 28% discount to Brait’s latest valuation of Premier, after adjusting for the 1 billion rand refinancing of Premier’s long-term debt on Nov. 2.
Irrevocable agreements have been reached with Titan Premier Investments, who agreed to purchase 36.2% of the offer shares and an unnamed institutional investor, who agreed to purchase 2.4%, Brait said.
Premier, owner of Blue Ribbon bread, Snowflake wheat flour and Iwisa and Nyala maize meal brands, produced revenue growth of 16.1% at 14.5 billion rand in the year ended March, with adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of 1.49 billion rand.
The group vies for market share with food producer giant Tiger Brands and other rivals such as Pioneer Food and RCL Foods.
According to DataOrbis market share data cited by Brait, Premier had an approximate 24% market share in bread, a 32% market share in flour, a 20% market share in maize and an 18% market share in total sugar-based confectionery in the year end August.
