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Bidcorp lists on JSE, creates platform for growth

Bid Corporation CEO Bernard Berson discusses Bidcorp's listing and outlook for the company in the current global economic climate. Cameraperson: Nicholas Boyd. Editing: Lionel da Silva

30th May 2016

By: Mia Breytenbach

Creamer Media Deputy Editor: Features

  

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International broad-line foodservice group Bid Corporation Limited (Bidcorp), which houses the international and local foodservice operations and assets unbundled from Bidvest Group Limited, has listed on the Johannesburg Stock Exchange (JSE) in an attempt to facilitate future growth.

Speaking at the listing in Johannesburg on Monday, Bidcorp CEO Bernard Berson described the listing as “an exceptionally exciting event”, noting that it represented the next step in the company’s journey “to becoming a global leader in the foodservice industry and positioned [Bidcorp] superbly for its next phase of organic and acquisitive growth”.

From opening on the main board, Bidcorp’s share prices fluctuated between R260 and R270 a share, taking its market capital to about R90-billion and making it “quite a sizeable company”, according to Berson.

While Bidcorp was satisfied with the level at which shares opened on Monday, Berson acknowledged that share prices would be volatile for a period.

He added that Bidcorp did not raise any equity from the unbundling and listing. “The question of access to capital didn't enter into our requirements, so the JSE was an obvious and good choice for us,” he noted.

Berson suggested that Bidcorp’s focus as a standalone company would strengthen management’s determination to continue generating and enhancing sustainable, long-term returns for all stakeholders as it continued to ensure the delivery of improved efficiencies and robust cash flows.

Bidcorp’s listing on the JSE would further enable its management to focus on realising the potential in foodservice operations and on creating an improved platform from which to pursue both organic and acquisitive growth.

Benefits derived from the listing would include improved management focus, which would not only assist in identifying acquisition opportunities, both locally and abroad, but would also enable management to mitigate and manage the specific risks and challenges facing Bidcorp’s diverse product range and geographic areas of operation.

This would enable management to dramatically increase their scope for entrepreneurial flair, said Berson.

JSE CEO Nicky Newton-King noted that the addition of Bidcorp to the JSE was a significant development for the market and represented “great potential” for the growth of food retailers and the wholesaler sector.

“This listing is the sixth on the JSE this year and provides investors with the ability to invest specifically in Bidvest’s extensive food assets around the world,” she said.

The JSE currently had eight companies in the food retailers and wholesaler sector with a market cap of about R220-billion. Overall, nearly 400 companies were listed on the JSE, with a market cap of nearly R15-trillion.

“They are coming to the market as part of one of the biggest industries on the JSE. The R1.5-trillion strong consumer services industry has seen healthy growth over the past few years,” Newton-King noted.

While Bidcorp has grown into a substantial international business, Berson reiterated that the company remained true to its South African heritage and it saw the JSE “as an exciting platform to share in the next chapters in our exciting story”.

Bidcorp, which unbundled from the Bidvest group in April, was present in developed and developing economies on five continents and comprised well-established, leading and rapidly growing market positions.

According to Berson, when integrated with Bidvest, Bidcorp became a more significant contributor over time, and started to represent about half of the group’s total operating profit.

“[However,] . . . the two businesses were very different . . . [with] different requirements, different needs and strategies moving forward. . . [T]he best way to ensure the continued success of both units would be to unbundle,” he said, adding that the unbundling was aimed at providing Bidvest and Bidcorp with their own identity and independence going forward.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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