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Steinhoff Africa Retail Limited (“Star”) - Intention To Float Announcement
Steinhoff International Holdings N.V.
(Incorporated in the Netherlands)
(Registration number: 63570173)
Share Code: SNH
ISIN: NL0011375019
("Steinhoff")
NOT FOR DISTRIBUTION, PUBLICATION OR RELEASE, IN WHOLE OR IN PART DIRECTLY OR INDIRECTLY,
IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY OTHER JURISDICTION IN
WHICH THE DISTRIBUTION, PUBLICATION OR RELEASE WOULD BE UNLAWFUL.
STEINHOFF AFRICA RETAIL LIMITED (“STAR”) - INTENTION TO FLOAT ANNOUNCEMENT
This announcement is not an offer of securities for sale or subscription in the United States or any other
jurisdiction. This announcement is not a prospectus and not an offer to sell, or a solicitation of an offer to
subscribe for or to acquire, securities in the United States or any other jurisdiction, including in or into the
United States, Australia, Canada, Japan or South Africa. Neither this announcement nor anything contained
herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in
any jurisdiction.
STAR ANNOUNCES ITS INTENTION TO FLOAT ON THE JSE MAIN BOARD
STELLENBOSCH, 23 August 2017, Steinhoff Africa Retail Limited (“STAR” or the “Company”), a wholly
owned subsidiary of Steinhoff, is pleased to announce its intention to list its issued ordinary share
capital on the main board of the securities exchange operated by the JSE Limited (the “JSE”),
subject to market conditions and approval by the JSE (the “Listing”), which is still expected to be
completed before the end of September 2017.
STAR is a leading low-cost retailer servicing value-conscious consumers in Sub-Saharan Africa. With
over 4 800 stores to date, STAR has one of the largest retail footprints in the region and has a proven
and sustainable price leadership strategy across multiple brands and retail categories that is
based upon sourcing products at low cost and distributing them through STAR’s extensive retail
platform. The Company operates across various stable and growing sectors, including apparel,
footwear, household goods, furniture, consumer electronics, appliances, general merchandise
and building materials, while also providing financial and mobile services.
STAR was established on 1 July 2017 following an internal restructuring by Steinhoff of its African
retail assets (“the STAR Group”). Since Steinhoff will continue to be a controlling shareholder in the
Company, the STAR Group will continue to leverage off Steinhoff’s strategic expertise, centralised
sourcing, manufacturing and logistics expertise in order to maximise operating efficiencies across
its retail operations following the Listing.
More information on the STAR Group will be available on the Company’s website:
www.steinhoffafricaretail.co.za
KEY STRENGTHS AND COMPETITIVE ADVANTAGES
The following key strengths and competitive advantages are expected to contribute to the
continued growth and success of the STAR Group:
• retail champion with largest footprint in formalising African market;
• high exposure to Africa’s emerging consumer class;
• defensive discount model winning in a changing consumer environment;
• “Best Price Leadership” strategy effective in developing customer loyalty and volume growth;
• established multi-brand strategy offerings across the entire discount and value spectrum;
• nationwide coverage in key African markets serving customers at their convenience;
• superior supply chain management expertise and extensive sourcing scale, protecting prices;
• strong organic and innovative growth opportunities and initiatives;
• highly cash generative and robust operating model with track record of strong financial
performance; and
• innovative and experienced management team, with loyal and committed employees.
GROWTH STRATEGY
The STAR Group’s vision is to be the preferred destination for delivering value to the African
consumer and all other stakeholders. The STAR Group seeks to do this by providing everyday
products at affordable prices and serving customers at their convenience, and aims to achieve
this strategy through various organic and innovative growth opportunities and initiatives, which
include, among others, the roll-out of new stores, leveraging its store footprint to capitalise on
virtual product development, increasing its market share in financial and other services, entry into
new product offerings and services, and leveraging group synergies and operating platforms to
lower costs. The STAR Group will also continue to explore categories of products and services in
which it has low market shares with a view to expand in these areas.
KEY FINANCIAL METRICS AND OUTLOOK
For the 12 months ended 30 September 2016, the STAR Group reported revenue of R51 234 million,
earnings before interest and tax and capital items (“EBIT”) of R3 485 million and earnings before
interest, tax, depreciation and amortisation and capital items (“EBITDA”) of R4 397 million.
During the periods under review the STAR Group made two sizeable acquisitions and
implemented a brand consolidation and restructure of the furniture operations. These acquisitions,
the consolidation and the restructure will have a positive impact on the performance of STAR
going forward. After adjusting for the acquisitions and one-off brand consolidation and
restructuring related expenditure, the STAR Group would have reported EBIT of R4 855 million and
EBITDA of R5 776 million on a pro-forma basis for the 12 months ended 30 September 2016.
Looking ahead, after the aforementioned adjustments, the STAR Group expects to achieve pro
forma EBIT of R6 063 million and pro-forma EBITDA of R7 016 million for the 12 months ending 30
September 2017 (“FY17”). STAR expects to list with approximately two times net debt to FY17
EBITDA ratio. Further store openings and organic initiatives will provide opportunities for expanding
operating margin and maintaining strong growth momentum.
THE PRIVATE PLACEMENT AND LISTING
In conjunction with the Listing, the Company expects to make an offer to certain selected
investors to subscribe for ordinary shares in the Company by way of a private placement (the
“Private Placement”). Any offer to subscribe for ordinary shares in the Company pursuant to the
Private Placement will be made, and any investor should make his investment decision, solely on
the basis of the information that is contained in the Pre-listing Statement to be published by STAR
in due course (the “Pre-listing Statement”). The Private Placement will be offered to and only be
capable of acceptance by, certain qualifying investors and will not be an offer to the public in
any jurisdiction.
THE SHOPRITE TRANSACTION
As announced on 4 August 2017 (“the Announcement”), the STAR Group has secured options
which, once exercised, will result in STAR acquiring a strategic investment in Shoprite Holdings
Limited (“Shoprite”), one of Africa’s leading food and grocery retailers with a track record of
successful growth and expansion in South Africa and across the continent (“Call Options”). Further
details on the Call Options were contained in the Announcement and will be detailed in the Pre-
listing Statement.
Stellenbosch
23 August 2017
CITI: JOINT GLOBAL COORDINATOR
INVESTEC: JOINT GLOBAL COORDINATOR
MORGAN STANLEY: JOINT GLOBAL COORDINATOR
RMB: JOINT GLOBAL COORDINATOR
J.P.MORGAN: JOINT BOOKRUNNER
STANDARD BANK: JOINT BOOKRUNNER
PSG CAPITAL: TRANSACTION AND CORPORATE SPONSOR
ENQUIRIES
Steinhoff & STAR: Mariza Nel, +27 (0)21 808 0711;
Citigroup: Patrick Evans, +44 (0)20 7986 1931; Nick Pagden, +27 (0)11 944 0000;
Investec: Carlyle Whittaker, +27 (0)11 286 9994; Hugo Steyn, +27 (0)21 416 3314;
Morgan Stanley: Mark Maislish, +44 (0)20 7425 9059;
RMB: Stephen Friesenecker, +27 (0)11 282 4505
DISCLAIMER
The contents of this announcement have been prepared by and are the sole responsibility of STAR.
The information contained in this announcement is for background purposes only and does not purport to
be full or complete. No reliance may be placed by any person for any purpose on the information contained
in this announcement or its accuracy, fairness or completeness.
This announcement is not for publication or distribution, directly or indirectly, in or into the United States
(including its territories and possessions, any State of the United States and the District of Columbia), Australia,
Canada or Japan. The distribution of this announcement may be restricted by law in certain jurisdictions and
persons into whose possession any document or other information referred to herein should inform themselves
about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation
of the securities laws of any such jurisdiction.
This announcement does not constitute or form a part of any offer or solicitation to purchase or subscribe for
securities to any person in the United States, Australia, Canada or Japan or in any jurisdiction to whom or in
which such offer or solicitation is unlawful. The securities referred to herein (the “Shares”) may not be offered
or sold in the United States unless registered under the U.S. Securities Act of 1933, as amended (the “Securities
Act”) or offered in a transaction exempt from, or not subject to, the registration requirements of the Securities
Act. The offer and issue of the Shares has not been, and will not be, registered under the Securities Act or
under the applicable securities laws of Australia, Canada or Japan. Subject to certain exceptions, the Shares
referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or
benefit of, any national, resident or citizen of Australia, Canada or Japan. There will be no public offer of
securities in the United States, Canada, Australia and Japan.
This announcement does not constitute or form a part of any offer or solicitation or advertisement to purchase
and/or subscribe for Shares in South Africa, including an offer to the public for the sale of, or subscription for,
or the solicitation of an offer to buy and/or subscribe for, shares as defined in the South African Companies
Act No. 71 of 2008 (“South African Companies Act”), as amended and will not be distributed to any person
in South Africa in any manner that could be construed as an offer to the public in terms of the South African
Companies Act. In South Africa this announcement is directed only at (i) persons falling within the exemptions
set out in section 96(1)(a) or (ii) persons who subscribe, as principal, for Shares at a minimum aggregate
subscription price of R1 000 000, as envisaged in section 96(1)(b), of the Act (all such persons in (i) and (ii)
being referred to as “relevant persons”). The Private Placement and any other investment activity to which
this announcement relates will only be available to, and will only be engaged with, relevant persons. Any
person who is not a relevant person should not act on this announcement or any of its contents. This
announcement does not, nor does it intend to, constitute a “registered prospectus”, as contemplated by
the South African Companies Act.
The information contained in this announcement constitutes factual information as contemplated in section
1(3)(a) of the South African Financial Advisory and Intermediary Services Act, 37 of 2002, as amended and
should not be construed as an express or implied recommendation, guide or proposal that any particular
transaction in respect of the Shares or in relation to the business or future investments of the Company is
appropriate to the particular investment objectives, financial situations or needs of a prospective investor,
and nothing in this announcement should be construed as constituting the canvassing for, or marketing or
advertising of, financial services in South Africa.
In member states of the European Economic Area (each, a “Relevant Member State”), this announcement
and any offer if made subsequently is directed only at persons who are “qualified investors” within the
meaning of the Prospectus Directive (“Qualified Investors”). For these purposes, the expression “Prospectus
Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending
Directive, to the extent implemented in a Relevant Member State), and includes any relevant implementing
measure in the Relevant Member State and the expression “2010 PD Amending Directive” means Directive
2010/73/EU. In the United Kingdom this announcement is directed exclusively at Qualified Investors (i) who
have professional experience in matters relating to investments falling within Article 19(5) of the Financial
Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the “Order”) or (ii) who fall
within Article 49(2)(A) to (D) of the Order, and (iii) to whom it may otherwise lawfully be communicated, and
any investment activity to which it relates will only be engaged in with such persons and it should not be
relied on by anyone other than such persons.
Copies of this announcement are not being made and may not be distributed or sent into the United States,
Canada, Australia or Japan.
This announcement may include statements that are, or may be deemed to be, “forward-looking
statements”. These forward-looking statements may be identified by the use of forward-looking terminology,
including the terms “believes”, “estimates”, “plans”, “projects”, “anticipates”, “expects”, “intends”, “may”,
“will” or “should” or, in each case, their negative or other variations or comparable terminology, or by
discussions of strategy, plans, objectives, goals, future events or intentions. Forward-looking statements may
and often do differ materially from actual results. Any forward-looking statements reflect the Company’s
current view with respect to future events and are subject to risks relating to future events and other risks,
uncertainties and assumptions relating to the Company’s business, results of operations, financial position,
liquidity, prospects, growth and strategies. Forward-looking statements speak only as of the date they are
made. Kindly note that any forecast financial information contained in this announcement has not been
reviewed and reported on by Steinhoff’s or STAR’s auditor in accordance with paragraph 8.40(a) of the
Listings Requirements of the JSE.
Each of the Company, Steinhoff, Citigroup, Investec, J.P. Morgan, Morgan Stanley, PSG Capital, RMB and
Standard Bank and their respective affiliates expressly disclaims any obligation or undertaking to update,
review or revise any forward looking statement contained in this announcement whether as a result of new
information, future developments or otherwise.
Any subscription of Shares in the proposed Private Placement should be made solely on the basis of the
information contained in the Pre-listing Statement to be issued by the Company in connection with the
Private Placement. The information in this announcement is subject to change. Before subscribing for or
purchasing any Shares, persons viewing this announcement should ensure that they fully understand and
accept the risks which will be set out in the Pre-listing Statement when published. No reliance may be placed
for any purpose on the information contained in this announcement or its accuracy or completeness. This
announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of
any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the
fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.
The date of the Listing may be influenced by a variety of factors which include market conditions. There is no
guarantee that Listing will occur and you should not base your financial decisions on the Company’s
intentions in relation to Listing at this stage. Acquiring investments to which this announcement relates may
expose an investor to a significant risk of losing all of the amount invested. Persons considering making such
investments should consult an authorised person specialising in advising on such investments. This
announcement does not constitute a recommendation concerning the Private Placement. The value of
shares can decrease as well as increase. Potential investors should consult a professional advisor as to the
suitability of the Private Placement for the person concerned.
None of Citigroup, Investec, J.P. Morgan, Morgan Stanley, PSG Capital, RMB and Standard Bank or any of
their respective directors, officers, employees, advisers or agents accepts any responsibility or liability
whatsoever for/or makes any representation or warranty, express or implied, as to the truth, accuracy or
completeness of the information in this announcement (or whether any information has been omitted from
the announcement) or any other information relating to the Company, its subsidiaries or associated
companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made
available or for any loss howsoever arising from any use of the announcement or its contents or otherwise
arising in connection therewith.
Each of Citigroup, Investec, J.P. Morgan, Morgan Stanley, PSG Capital, RMB and Standard Bank is acting
exclusively for STAR and Steinhoff and no-one else in connection with the Private Placement. They will not
regard any other person as their respective clients in relation to the Private Placement and will not be
responsible to anyone other than STAR and Steinhoff for providing the protections afforded to their respective
clients, nor for providing advice in relation to the Private Placement, the contents of this announcement or
any transaction, arrangement or other matter referred to herein.
Morgan Stanley is authorised in the United Kingdom by the PRA and regulated in the United Kingdom by the
PRA and FCA.
In connection with the Private Placement, each of Citigroup, Investec, J.P. Morgan, Morgan Stanley, RMB
and Standard Bank and any of their respective affiliates, may take up a portion of the Shares as a principal
position and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts
in such Shares and other securities of STAR or related investments in connection with the Private Placement
or otherwise. Accordingly, references in the Pre-listing Statement, once published, to the Shares being issued,
offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to,
or subscription, acquisition, placing or dealing by any of Citigroup, Investec, J.P. Morgan, Morgan Stanley,
RMB and Standard Bank and any of their respective affiliates acting in such capacity. In addition, Citigroup,
Investec, J.P. Morgan, Morgan Stanley, RMB and Standard Bank may enter into financing arrangements and
swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of
Shares. None of Citigroup, Investec, J.P. Morgan, Morgan Stanley, RMB and Standard Bank nor any of their
respective affiliates intend to disclose the extent of any such investment or transactions otherwise than in
accordance with any legal or regulatory obligations to do so.
In connection with the Private Placement, the Company may appoint a stabilisation manager, who may,
subject to the JSE Listings Requirements and other applicable law, over-allot Shares or effect other
transactions with a view to supporting the market price of the Shares at a level higher than that which might
otherwise prevail for a limited period after the date of the Listing. However, there will be no obligation on the
stabilisation manager to do so. Such stabilising action may under no circumstances continue beyond the
30th calendar day after the date of the Listing.
Unless otherwise indicated, market, industry, market share and competitive position data are estimates (and
accordingly, approximate) and should be treated with caution. Such information has not been audited or
independently verified, nor has the Company ascertained the underlying economic assumptions relied upon
therein.
Date: 23/08/2017 08:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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