Tycoon’s family to forego Pick n Pay control as retailer revamps
The Ackerman family is stepping aside as the majority voting shareholder of Pick n Pay Stores Ltd. amid a revamp of South Africa’s third-largest grocer by revenue.
The move comes as Gareth Ackerman also said he will retire as the chairman of the board of directors next year as the company focuses on a strategy to restore the core Pick n Pay supermarket business to profitability. He will continue to serve on the board, the Cape Town-based company said in a statement on Tuesday.
“For Pick n Pay to survive and thrive again, it needs to embark on a fundamental step change,” the outgoing chairman said in an investor presentation. “We need new blood and ideas.”
The family’s investment-holding company has given “firm written confirmation to vote in favor” of the planned 4 billion-rand ($217 million) rights offer and will follow its rights to a maximum amount of 1.025 billion rand. There is a standby underwriting agreement with Absa Group Ltd., Rand Merchant Bank and Standard Bank Group Ltd.’s South African unit, it said.
Pick n Pay last year abruptly brought back former leader Sean Summers as chief executive officer, after warning it would post its first interim loss since at least 2001. Earlier Tuesday it reported weak annual earnings, driven by a substantial trading loss.
The rights offer will be followed by an initial public offering of its low-cost Boxer business, likely by the end of this year. The three-year turnaround plan includes a review of more than 100 stores. Some Pick n Pay supermarkets will be converted to Boxer outlets, while other multi-year loss-making Pick n Pay shops will be closed.
The stock fell 3.3% as of 9:43 a.m in Johannesburg, bringing its decline in the past 12 months to 30%.
