Simbisa Brands Limited's shareholders yesterday unanimously gave directors the green light to acquire a 50 percent stake in global family owned and run food and beverages company Foodfund and at the same time a secondary listing on the London Stock Exchange's Alternative Investment Markets (AIM).
The secondary listing on AIM is expected to be done by end of September this year with the acquisition settled via a staggered issuance of up to 99 312 500 Simbisa Aim-listed shares issued to Foodfund sellers. The staggered issuance will be over a four year period.
Simbisa chief executive Basil Dionisio told the extraordinary general meeting that the transaction, is expected to expand Simbisa's product offering range, from the Quick Service Restaurant (QSR) concept into the casual and fine dining space occupied by Foodfund. Customer spend in the QSR business is between $0,50 and $9 while that of fine dining is between $10 and $80.
"The primary focus in the casual and fine dining business is the $10 to $40 bracket," he said.
The group will leverage on existing infrastructure to establish the new casual and fine dining outlets. This means they will only build new shops and use the same storage and distribution facilities to dominate Africa.
"We could have gone for a franchise, but we prefer to own our brands so that if you are in Ghana for instance our chicken can be spicier instead of being rigid because franchises say it is intellectual property," Mr Dionissio said.
Simbisa financial director Salim Eceolaza said initially the proposal was to acquire 100 percent of Foodfund in exchange for some shares in Simbisa on the ZSE.
"Foodfund, (however), would prefer their shares offshore and London is better for obvious reasons," Mr Eceolaza said.
The group's decision comes at a time foreign franchises and new brands like Ocean Basket, News Café, Chop Chop, Roco Mamas and Pizza Hut are fast establishing in the country's casual and fine dining space.
According to set timelines, regulatory approvals, from the ZSE, the RBZ and the LSE, for a secondary listing of up to 49 percent of Simbisa total issued shares on the London AIM are anticipated to be complete within the coming few weeks.
Simbisa said by end of September, a maximum of 75 000 000 shares will be issued in order to raise capital via an initial public offering on the AIM. The exact amount raised will depend on market sentiment and will be used to fund regional expansion activities as well as mergers and acquisitions. A total 21 717 500 shares will be issued to Foodfund on the effective date of the transaction.
"The remaining 77 595 000 shares will be issued at the end of financial year 2022 upon Foodfund achieving pre-determined financial targets," Mr Eceolaza said.
Foodfund was developed as a concept over 10 years ago by Costa Tomazos, the Chairman of Food Fund International, who started his F&B experience in the 1970s by opening one of the first steakhouse chains in South Africa. Its brands include elite brand of steakhouse The Meat Co, traditional Greek restaurant Eat Greek, casual dining restaurant Tribes, Ribs and Rumps, Inyama, Benltey's Bistro and Bar and Woodchuck Chicken.