Retailer Pick n Pay has drawn in R4.7 billion through the sale of Boxer shares to help fund its turnaround strategy.
The group announced late on Monday (18 May) that it would launch a bookbuild offering of Boxer shares for R4.7 billion.
On Tuesday (19 May), the group confirmed the sale of around 57.3 million Boxer ordinary shares, representing approximately 12.5% of the total issued ordinary shares of Boxer.
Following the Placement, Pick n Pay will continue to hold approximately 53.1% of Boxer’s total issued ordinary shares, having reduced this from over 65% before.
Pick n Pay said the proceeds of the sale would go into its turnaround.
The retailer has spent the last two years rebuilding its core Pick n Pay brand following years of decline in the sector, losing out to competitors and dropping its failed retail strategy.
The business hit a nadir in 2024 when it was found to be technically insolvent, forcing the group to change tack.
The group put its bets on the return of former chief executive Sean Summers, a changing of chairmanship from the Ackerman family, and a concerted effort to rightsize the business through shedding non-performing stores.
According to Pick n Pay, the group has made significant progress on multiple aspects of this turnaround plan, and the proceeds from the Boxer share sale will boost this.
“The product offering has been meaningfully enhanced, execution of in-store retail principles has been improved, and the quality of the store estate has been upgraded,” it said.
“A new logistics agreement is set to deliver efficiencies over the coming years.”
In combination, these factors have driven improved like-for-like sales growth in Pick n Pay company-owned supermarkets, together with improved gross margin.
These are set to deliver further benefits going forward, it said.
“Building on this progress, the Group remains focused on further strengthening the performance of the Pick n Pay segment’s cashflow generation and returning it to profitability.”
The group said it intends to deploy the net proceeds from the Boxer sale to support the ongoing implementation of this plan and growth strategy, while ensuring maximum financial flexibility in the medium term.
“This will enable the Group to continue executing on its strategic priorities, investing ahead of the plan, with a clear pathway to returning the core Pick n Pay Stores segment to cashflow break-even,” it said.
The group stressed that Boxer remains a vital part of the business, and it intends to retain a controlling stake in the discount retailer.
Boxer worth more than Pick n Pay
An interesting dynamic between Boxer and its parent, Pick n Pay, is that the former has a far higher value than the latter.
Boxer has quickly become one of the most valuable retailers in South Africa with a market cap of R40.5 billion, which is far above Pick n Pay’s R16.6 billion.
Incidentally, much of Pick n Pay’s own value is tied to Boxer.
The group is also worth more than several other major convenience retailers in South Africa, based on market cap, including SPAR (R12 billion), TFG (R19 billion), and Dis-Chem (R31.6 billion), and is sitting close to Woolworths (R41.6 billion).
Shoprite remains the most valuable retailer in the country with a market cap of R172.8 billion, with Pepkor at R81.5 billion.
As a standalone retailer, Boxer is also massively expanding its store base across South Africa, with the group looking to expand its discount offerings.
In its recent financial results for the year ended 1 March, grocery retailer Boxer said that it added 51 net new stores in 2026, bringing its nationwide store count to 576.
The group added 18 new superstores, 31 liquor stores, and 2 new build stores. Liquor stores as a percentage of Superstores rose from 55% to 61%.
According to its financial results, Boxer’s new stores contributed 7.8% total turnover growth, excluding like-for-like sales.
Source: https://businesstech.co.za/news/business/860695/pick-n-pay-sells-r4-7-billion-in-boxer-shares/