Banks receive R80m

ATH subscribed for 64m rights offer shares’ at a total value of more than Ribn.

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Three investment banks - RMB, Absa and Standard Bank were paid a total of R80 million for their role as underwriters in Pick n Pay's just-concluded rights offer.

Underwriters effectively guarantee that funds sought by a company in a rights issue will be raised. The underwriting fees equate to 70% of all fees paid for the capital raise.

The retailer raised R4 billion after its successful completion.

Pick n Pay had subscriptions of over R8.2 billion, or 106% of the amount it had planned to raise.

Nearly 99% of shareholders followed their rights.

After the founding Ackerman family, the Public Investment Corporation is the next largest shareholder (17.8%), with a Fidelity fund and Allan Gray fund each holding roughly 7%.

The strong support is not at all surprising given the significant discount at which the rights offer shares were pitched.

At R15.86, this was around a third cheaper (32.48 %) than the price it had been trading at before the announcement.

"We are really pleased with this result," says CEO Sean Summers.