Food chain Spar lists on JSE

JOHANNESBURG – South African food retailer Spar debuted on the JSE Securities Exchange yesterday, after parent company Tiger Brands’ unbundled the group, trading within the 18 rand to 23 rand range the market expected, analysts said.

The share was trading at 20,85 rand by 0905 GMT valuing the company at around 3,4 billion rand. The stock opened at 22.07 rand and reached an intraday high of 22,49 rand.The market had anticipated a range of between 18 rand and 23 rand.”It is currently on the lower end of that range but it is too early to say that is where it will settle,” said Gryphon Asset Management’s Abri du Plessis.He said he had expected the share to trade at a discount compared to companies like Pick ‘n Pay but the opening levels were too cheap.Spar is currently on a 12 PE ratio while Pick ‘ Pay is at 14, he added.Parent company Tiger Brands said it would divest itself of the business.Its share price fell 18,47 per cent to 82,89 rand.”You basically had to subtract the price of share from that of Tiger Brands to get to the new price,” Du Plessis said.Shareholders in the group received one Spar share for every Tiger Brand share they held.The group also said it wanted to unlock value for shareholders in both the supermarket chain and the remaining group.Spar operates more than 700 franchise stores and a number of distribution centres across South Africa and has operations in neighbouring Botswana, Namibia, Swaziland and Zimbabwe.-Nampa-ReutersThe stock opened at 22.07 rand and reached an intraday high of 22,49 rand.The market had anticipated a range of between 18 rand and 23 rand.”It is currently on the lower end of that range but it is too early to say that is where it will settle,” said Gryphon Asset Management’s Abri du Plessis.He said he had expected the share to trade at a discount compared to companies like Pick ‘n Pay but the opening levels were too cheap.Spar is currently on a 12 PE ratio while Pick ‘ Pay is at 14, he added.Parent company Tiger Brands said it would divest itself of the business.Its share price fell 18,47 per cent to 82,89 rand.”You basically had to subtract the price of share from that of Tiger Brands to get to the new price,” Du Plessis said.Shareholders in the group received one Spar share for every Tiger Brand share they held.The group also said it wanted to unlock value for shareholders in both the supermarket chain and the remaining group.Spar operates more than 700 franchise stores and a number of distribution centres across South Africa and has operations in neighbouring Botswana, Namibia, Swaziland and Zimbabwe. -Nampa-Reuters