Deacons Kenya plans to list its shares on the Nairobi Securities Exchange (NSE) for Sh15 each valuing the clothing retailer at Sh1.85 billion.
The listing by introduction of 123,558,228 shares is scheduled for August 2, at the NSE’s alternative investment market segment (Aims).
With the listing the retailer’s shares will stop trading on the over-the-counter (OTC) market next Monday where they have been exchanging for the last six years as the company dithered on selling its shares to the public.
“The shares will be listed on alternative investment market of the Nairobi Securities Exchange on August 2, 2016,” said the company in a statement.
Deacons operates clothing outlets such as Truworths and Mr Price in four markets; Kenya, Uganda, Rwanda and Mauritius.
The company had sold some its shares to a select number of investors in 2010 through a private offer. Deacons was selling 12,800,000 shares at Sh62.5 each during the private offer aiming to raise Sh800 million. The offer was 87.5 per cent subscribed raising Sh700 million.
Listing by introduction signals the company will not be seeking additional capital from the market. The mode is an easier and faster entry route to the stock market with fewer regulatory scrutiny compared to an initial public offering.
The company has picked Kestrel Capital as its transaction advisers with Coulson Harney as legal advisers and Deloitte & Touche its reporting accountants.
Deacons has ridden on the rise of middle class in the country to expand operations following profit growth.
Last year it posted an 85 per cent growth in after tax profit to Sh113.8 million from Sh61.4 million the year before.
The company has been operational for nearly 60 years having been founded as a franchise for Marks & Spencer for East African in late 1950s.
The firm says that it underwent a major realignment in 1980 when the Kenyan government restricted importation of foreign goods, forcing it to do away with the Marks & Spencer franchise. It then began to partner with the local textile industry which supplied its stores.
In the early 1990s, the economy was liberalised allowing Deacons to deal with international brands again. It acquired the Truthworths franchise in 1999. It launched locally owned 4U2 brand in 2003 targeting the middle class.
It brought in Mr Price in December 2007 with its first store at The Junction Mall.
Credit: Business Daily