April 24, 2018 / 11:34 AM / a year ago

South Africa's Libstar targets at least $692 million valuation in IPO

JOHANNESBURG (Reuters) - Libstar Holdings IPO-LBRJ.J on Tuesday priced its initial public offering in a range of 12.50 rand and 16 rand, valuing the South African maker of sweets and gluten-free buns at 8.5 billion rand ($691.9 million) or more.

Libstar’s share sale on the Johannesburg bourse comes as glass bottle maker Consol [CNSOLG.UL] is to float on May 4.

The listing of Libstar, whose customers include upmarket food retailer Woolworths (WHLJ.J), will test the confidence of business leaders and investors in newly elected President Cyril Ramaphosa and his promises to revive the economy.

Libstar, which has permission to list 681.3 million shares, aims to sell 105.3 million shares, or a roughly 17 percent stake, at between 12.50 and 16 rand each to raise up to 1.5 billion rand ($122.07 million). The pricing range values the company at between 8.5 billion rand and 11 billion rand.

Excluding about 73 million shares held in treasury on behalf of black investors, the range values the company at between 7.6 billion rand and 9.7 billion rand.

Vendor-financed black economic empowerment, or BEE, shares are not tradable until the scheme matures. They are issued as part of the government drive to address income and economic inequalities from the apartheid era.

The offer also includes the sale of 132.4 million shares by existing shareholders, which include private equity firm Abraaj and the Public Investment Corporation, which manages South African government employee pensions.

“The listing is the next step in the group’s growth phase,” the company said in a regulatory filing, adding that it was tapping capital markets to fund growth opportunities.

Libstar said 1.3 billion rand from the IPO would be used pay down debt, while the remainder would be used to pursue acquisitions and invest in existing businesses.

The firm has annual core profit, or EBITDA, of 940 million rand notched up on annual sales of nearly 9 billion rand.

The final pricing will be released on May 4 and the listing is pencilled in for May 9.

($1 = 12.2844 rand)

Reporting by Patricia Aruo; Editing by Louise Heavens and Edmund Blair

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