SOUTH AFRICA – Bidvest’s planned listing of its Foodservice business is back on the table, but this time the main listing will be in Johannesburg instead of London.
The announcement on Monday comes little more than a year after the global services, trading and distribution group, headed by Brian Joffe, said a potential listing of its Foodservice business on the London Stock Exchange — with an “inward secondary listing on the JSE” — was off.
Bidvest executives did not elaborate on the announcement, having said this would allow shareholders to participate directly in food-service operations.
However, Mark Hodgson, industry analyst at Avior Capital Markets, said the market had taken the news “positively”, as a JSE listing was quicker, less complex and less costly.
“It does take Bidvest forward in terms of … unlocking the food-services value for shareholders including putting food-services business in play.”
But, there was a risk that a “derating of the rump, largely South African business valuation, could take place”.
In the year to June last year, the group’s Bidvest SA division turned over about R87bn, while the global food-service business turned over about R116bn, or more than half of group turnover of R205bn.
But Bidvest SA was responsible for more than R5bn of the group’s overall trading profit of R9.7bn, while food services accounted for about R4bn of trading profit.
As well as from food, the group trades in automotive, consumer, electrical, financial services, freight, industrial, office, rental, and travel and aviation products, among others.
In 2014, Barclays Bank and Investec Bank had conducted a “preliminary evaluation” of the merits of listing the Foodservice operations in London.
But following this — as well as a review of the strategic positioning of the Bidvest group as a whole — the board announced in November that year that such actions would not be in the best interests of shareholders.
Last October, the company said it would restructure its business operations into “three distinct and independent companies”, each with its own board of directors, comprising senior executive management and independent directors.