{"id":778349,"date":"2024-06-21T16:23:55","date_gmt":"2024-06-21T14:23:55","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=778349"},"modified":"2024-06-21T16:27:26","modified_gmt":"2024-06-21T14:27:26","slug":"pick-n-pays-plan-to-save-itself","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/lifestyle\/778349\/pick-n-pays-plan-to-save-itself\/","title":{"rendered":"Pick n Pay&#8217;s plan to save itself"},"content":{"rendered":"\n<p>Raymond Ackerman\u2019s family is giving up some of their voting power in Pick n Pay Stores Ltd. to help the struggling South African retailer woo investors.&nbsp;<\/p>\n\n\n\n<p>Ackerman Investment Holdings Pty Ltd., the family\u2019s holding company, will reduce their voting control to below 50% after a planned rights offer is completed. <\/p>\n\n\n\n<p>The move helps \u201cchange perception outside the company,\u201d Pick n Pay\u2019s Chief Executive Officer Sean Summers said.<\/p>\n\n\n\n<p>The Ackerman family isn\u2019t alone in controlling the fate of its company. Meta Platforms Inc.\u2019s Mark Zuckerberg and Alphabet Inc.\u2019s founders have huge sway over their firms through dual-class shares that give them greater voting rights than the other. <\/p>\n\n\n\n<p>Many investors abhor such a structure, which raises corporate governance concerns. Johann Rupert, South Africa\u2019s richest man, controls Richemont through a similar setup.\u00a0<\/p>\n\n\n\n<p>\u201cThe appalling performance of Pick n Pay over a decade is good evidence then that family control is not always a good idea,\u201d said Shane Watkins, chief investment officer at All Weather Capital Pty Ltd. <\/p>\n\n\n\n<p>\u201cThe problem with control structures is it allows pretty much one person to make the important calls, and if they get it wrong, there can be very serious consequences.\u201d<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-businesstech wp-block-embed-businesstech\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"WeONASJg6Q\"><a href=\"https:\/\/businesstech.co.za\/news\/finance\/778014\/where-to-invest-in-south-africa-woolworths-vs-pick-n-pay-vs-spar-vs-shoprite\/\">Where to invest in South Africa: Woolworths vs Pick n Pay vs Spar vs Shoprite<\/a><\/blockquote><iframe loading=\"lazy\" class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; clip: rect(1px, 1px, 1px, 1px);\" title=\"&#8220;Where to invest in South Africa: Woolworths vs Pick n Pay vs Spar vs Shoprite&#8221; &#8212; BusinessTech\" src=\"https:\/\/businesstech.co.za\/news\/finance\/778014\/where-to-invest-in-south-africa-woolworths-vs-pick-n-pay-vs-spar-vs-shoprite\/embed\/#?secret=IxURtUjjly#?secret=WeONASJg6Q\" data-secret=\"WeONASJg6Q\" width=\"500\" height=\"282\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n\n\n\n<p>Pick n Pay\u2019s shares have dropped 30% in the past year compared with a 31% gain in larger rival Shoprite Holdings Ltd. Pick n Pay also announced its first annual loss on record for the year ended Feb. 25, according to data compiled by Bloomberg.<\/p>\n\n\n\n<p>Summers, who was rehired as CEO last year, has a three-year turnaround plan, including selling shares in its Boxer unit for as much as 8 billion rand ($446 million) and raising 4 billion rand in the rights offer.<\/p>\n\n\n\n<p>\u201cThe balance sheet was completely upside down, with a funding structure that was patently against us,\u201d Summers, 70, said. Still, Pick n Pay finished up its initial investor roadshow for Boxer last week and \u201cthe response has been phenomenal,\u201d he said.&nbsp;<\/p>\n\n\n\n<p>The structure of founders having more voting power was common in Africa\u2019s most industrialised nation during years of apartheid-related isolation. Though, that\u2019s changing now. Other tycoons have also given up their grip on the companies they founded.&nbsp;<\/p>\n\n\n\n<p>Dis-Chem Pharmacies Ltd. co-founder and CEO Ivan Saltzman sold a portion of the family\u2019s shareholding in 2021 to improve liquidity in the trading of the shares and provide an incentive for retaining key executives.<\/p>\n\n\n\n<p>Christo Wiese has held extra voting shares in Shoprite for more than 40 years. It was the use of this stock that ensured his re-election as chairman in 2019.&nbsp;<\/p>\n\n\n\n<p>While he gave up that position a year later, the 82-year-old still sits on the board of Africa\u2019s largest food retailer. That\u2019s even as his economic interest dropped when he sold Shoprite shares after losing about 59 billion rand when Steinhoff International Holdings NV imploded in late 2017.<\/p>\n\n\n\n<p>\u201cA lot of our family owners in South Africa overstay their welcome,\u201d said David Shapiro, who has more than 50 years years of experience on Johannesburg\u2019s stock exchange and is chief global equity strategist at Sasfin Securities. <\/p>\n\n\n\n<p>\u201cThough to actually move out is a very difficult decision to make.\u201d<\/p>\n\n\n\n<p>Wiese has argued that a significant shareholder is important when there are big decisions to be made and that \u201cyou don\u2019t just parachute people in.\u201d&nbsp;<\/p>\n\n\n\n<p>Stephen Saad, the founder and CEO of Aspen Pharmacare Holdings Ltd., agrees. He has been key in growing Aspen into Africa\u2019s largest drugmaker. He is the single biggest individual shareholder, with about 13% of Aspen\u2019s stock, but he doesn\u2019t control the company through special voting shares.<\/p>\n\n\n\n<p>While Pick n Pay expects the new structure to help lure investors, the retailer will still be closely associated with its founding family, Summers said.&nbsp;<\/p>\n\n\n\n<p>\u201cPick n Pay is inextricably linked to the Ackermans,\u201d he said.<\/p>\n\n\n\n<p>\u201cFor those that have an itch or irritation with the control structures, I say, Pick n Pay without the Ackermans is worse off.\u201d<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/lifestyle\/778268\/major-water-outages-hitting-joburg-next-week-these-are-all-the-areas-affected\/\">Major water outages hitting Joburg next week \u2013 these are all the areas affected<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Ackerman family is giving up its majority stake in Pick n Pay, with the group in desperate need of liquidity. <\/p>\n","protected":false},"author":59,"featured_media":774054,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9876],"tags":[26,4067],"class_list":["post-778349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","tag-headline","tag-pick-n-pay"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/778349","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=778349"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/778349\/revisions"}],"predecessor-version":[{"id":778359,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/778349\/revisions\/778359"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/774054"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=778349"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=778349"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=778349"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}