The new listing on the retail block
The value case for Steinhoff's new listing
Star listing’s arrival draws a generally positive response, though opinions differ about its valuation
In what was arguably one of the most contentious listings, Steinhoff Africa Retail (Star) entered the SA investment scene on September 20, sporting a R76bn market cap on the local bourse. It is a market cap that is set to rise to more than R100bn when the Christo Wiese-orchestrated transaction eventually closes. The deal will give Star a 22.7% economic interest in Shoprite and 50.6% of the food retail giant’s voting rights. Maiden annual results to September of the R60bn-revenue company are likely to come in with a bang. Star now houses Steinhoff’s African apparel, furniture and hardware interests. With Star’s share price trading at about R22 — a 7% premium on its R20.50 placing price — the share is on an immediate p:e of 24 and a one-year forward p:e of 22. Views on its attractiveness at these valuation levels are mixed. "I would say it looks very expensive," says Evan Walker of 36One Asset Management. By contrast, Sasfin Securities’ Alec Abraham is surprised that Star is trading a...
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