Steinhoff mulls sale of 25% of European unit in listing next year


Steinhoff International Holdings is considering the sale of about a quarter of Pepco Group through an initial public offering that could value the European retailer at more than R66 billion according to people familiar with the matter.

The listing could take place in the first half of next year, said the people, who asked not to be identified as the move hasn’t been announced. JPMorgan has been hired as one of the book runners, three of the people said, while Goldman Sachs has also been appointed, one of them said.

The sale of shares in Pepco would represent the latest in a string of asset sales for Steinhoff, which narrowly avoided collapse following an accounting crisis in late 2017. The South African owner of chains such as Mattress Firm in the US has been realizing funds to shore up its balance sheet and negotiated a debt restructuring with lenders earlier this year.

Pepco has about 2,700 outlets, including the PEPCO chain of Eastern European discount clothing stores and Poundland in the UK. The unit has been among Steinhoff’s best performers even after the scandal erupted, with earnings growth for the year through September expected to have been about 18%.

Pepco changed its name last month from Pepkor Europe. Bloomberg News first reported the IPO plans in August.

Steinhoff had considered selling Pepco shares in London and Warsaw, but may now only choose Poland, one of the people said. No final decision has been made, and Steinhoff could yet pursue other options for the business, the people said.

A representative for Steinhoff declined to comment. Spokespeople for JPMorgan and Goldman Sachs did not immediately respond to requests for comment.

PEPCO has been one of fastest-growing chains in eastern Europe, expanding the customer base from cost-savvy shoppers in smaller towns to bigger cities. The chain has expanded into Romania and other markets and plans to add about 300 stores a year across its 14 countries.

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