Money manager Coronation has taken a commanding position in Dis-Chem after the retailer’s founders sold shares worth R1.4bn to the asset manager.
Dis-Chem said Coronation now owns nearly 30% of the group’s stock after the transaction. The Cape Town-based asset manager held 24.3% of Dis-Chem before the deal.
The company said on Wednesday its founder and outgoing CEO, Ivan Saltzman, sold R1.4bn of shares, while his son Saul sold R87.9m of shares. This reduces the Saltzman family’s stake in the business to 29.31% from 35.12%.
Saul Saltzman has been with the group for more than 18 years and has had strategic roles in the business, including heading the import division and focusing on the group’s private label strategy.
The business was founded by Ivan Saltzman and his wife, Lynette, in 1978, and listed on the JSE in 2016.
They introduced the concept of a discount pharmacy with product categories not previously offered in SA pharmacies.
The Saltzmans, with other directors and prescribed officers at the group, last week sold its head office and Midrand distribution centre to the group in a transaction valued at nearly R500m.
“The transaction will ensure that Dis-Chem owns all its core distribution centres, as well as its head office premises in Midrand. The ownership of the asset is a long-term strategic objective of the group that has a positive impact on the income statement and a minimal impact on the balance sheet,” the company said.
The transactions take place months after Ivan Saltzman stepped down as the group’s CEO in June and handed over the reins to Rui Morais, the group’s former CFO.
Morais and his executive team are in line to get about R750m worth of the pharmacy group’s shares from the stake owned by the Saltzman family.
Increased stake
The company said last year that as part of the handover, the Saltzman family will divest 32.25-million Dis-Chem ordinary shares, 3.75% of its issued share capital, to Morais and a group of key senior executives to ensure “their ongoing commitment”.
The Public Investment Corporation in November increased its stake in Dis-Chem to just above 10%.
Dis-Chem is a group of companies specialising in the retail and distribution of pharmacy and healthcare products. It is worth about R26bn on the JSE.
The group has since grown its footprint to more than 250 stores, reporting revenue of R32bn in its latest results.
In an interview with Business Day last year, Saltzman said listing the company in 2016, shortly after opening their 100th store, was a proud moment.
“Dis-Chem’s listing in 2016 stands out as the key highlight of my career. The listing was vastly oversubscribed as Dis-Chem was already a well-known retail brand with much consumer and customer loyalty. There was strong institutional investor uptake, and the market was confident and positive,” he said.
“At the time I said that the listing would allow us to advance and improve our strategy to ensure that we could continue growing market share across our product offerings, as well as build on our established brand positioning. If I look back, that’s exactly what we have done.”
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