The listing of depository receipts on the US over-the-counter market allows American investors to invest in the local retailer.
While shareholders in the US cannot have shares registered in their name‚ the stock will be held on their behalf by the depository. "By establishing the ADR programme‚ Shoprite hopes to make investing in the company accessible to more international investors‚ particularly US investors‚" the Cape Town-based group said.
Shoprite has a growing international ownership base‚ which over the past five years has grown to more than 50% of the total shareholder base‚ with US investors representing about 62% of these international investors. The US‚ by country‚ is the largest investor base.
Each Shoprite depository receipt will represent one ordinary share and trade on the over-the-counter market under the name SRGHY.
Independent analyst Ian Cruickshanks said the ADR listing extends the opportunity for Americans to participate in the advances of Shoprite. "The company has taken the decision‚ based on our retail sector‚ which has become popular to investors who want a way to participate in growth‚ not just in SA‚ but in sub-Saharan Africa‚" he said.
"Shoprite is saying 'hey‚ lets go and push the story‚ just look at what a business we're running compared to other retailers‚ we're giving you global exposure to the developments in sub-Saharan Africa'.
"If they can establish a successful demand for their ADR listing‚ when emerging markets and SA are not that popular - that means success for future capital raising‚" he said.
In December‚ Shoprite opened its 1‚000th supermarket in Africa. It is one of the 129 new outlets that the group‚ which has a market capatalisation of around R95bn‚ will open across the continent between July 2013 and June 2014‚ 20 of which will be outside SA.
Retailers are boosting their presence in the rest of Africa as urbanisation and rising affluence fuel a consumer boom‚ with a rising middle class demanding high-quality brands and modern goods.
Although underdeveloped retail markets‚ infrastructure and bureaucracy hurdles are prevalent in Africa‚ SA's retailers have not been deterred.
Shoprite has earned its stripes as continental kingpin. Part of its success it owes to its first-mover status - it began its expansion in 1995‚ and its non-South African supermarket operations now span 16 countries in Africa‚ with more than 192 stores.
In 2012 the group raised R8bn‚ part of which is being used for capital expenditure.
Shoprite is the eighth local company to set up a programme this year‚ indicating the popularity of ADRs. Other companies to have listed ADRs in 2013 include Clover‚ Cashbuild‚ Blue Label Telecoms‚ Growthpoint Properties and Sibanye Gold.
Mr Price listed its ADRs in the US last year. Thirty-five of the JSE's top-40 stocks maintain depository receipt programmes.
