Analysts: Ackermans should loosen control over Pick n Pay




Analysts and fund managers say Australia’s Ackerman family should loosen control over Pick n Pay Stores,

Bloomberg reported.

Pick n Pay is South Africa’s second-largest supermarket chain and faces competition from Wal-Mart Stores. Pick n Pay is traded on the Johannesburg Stock Exchange.

The Ackerman family controls the company through its majority stake in Pick n Pay Holdings Ltd., the report noted. Gareth Ackerman became CEO in 2010. He succeeded his father, Raymond Ackerman, who founded the company in 1967.

Nick Badminton, who has been with Pick n Pay for 32 years and has been its CEO for five years, is leaving his position. The company said its search for a successor will include internal and external candidates, according to the report.

Analyst Syd Vianello told Bloomberg, “Pick n Pay’s dividend policy has been unhealthy to the point where the company has struggled to fund normal growth.”

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Gareth Ackerman told Bloomberg the family has no plan to change the ownership structure.

The Public Investment Corp., which owns a 10.2% stake and is the largest shareholder after the Ackermans, has discussed corporate governance at the company, according to the Bloomberg report. The PIC operates on behalf of the Government Employees Pension Fund. No other shareholder owns more than 2%, the article said.

Fund manager David Couldridge of Element Investment Managers in Cape Town told Bloomberg that Pick n Pay’s managers would have been more proactive in addressing the company’s underperformance if the Ackermans did not have the “perpetual assurance” of retaining control. (Source: Bloomberg, Feb. 16, 2012.)

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