New Lisings Via Unbundling, Demerger, Spin-Off, Split-Up and Secondary Listing.

Corporate actions like spin-offs, unbundling, demergers, split-ups, and separate listings can reshape companies, potentially resulting in the listing of new entities on stock exchanges. These strategic moves aim to unlock value, improve efficiency, and respond to market changes, offering investors new opportunities for investment and diversification.

For the context of these events:

Spin-Off

A spin-off is a strategic corporate action in which a parent company separates one of its divisions or subsidiaries into an independent entity. The purpose of a spin-off is often to unlock value, streamline operations, or allow the spun-off entity to pursue its own strategic direction. Spin-offs can occur for various reasons, including to focus on core business activities, enhance shareholder value, or respond to changing market dynamics.

Unbundling

Unbundling refers to the process of breaking apart a bundled business into its individual components and listing them separately. Companies often employ this strategy to maximize the value of their shareholders and divide a business into separate parts.

Demerger

A demerger is a corporate restructuring strategy wherein a company separates one or more of its business units or divisions into distinct entities. Demergers are often pursued to improve operational efficiency, enhance focus on core activities, or facilitate a strategic repositioning of the business.

Split-Up

A split-up refers to a single company splitting into multiple independent entities. The goal of such separations is typically to create standalone entities that can operate more efficiently, pursue distinct strategic objectives, or better capitalise on market opportunities.

Separate Listing

When a company decides to pursue a separate listing for one of its divisions or subsidiaries, it aims to access additional capital by allowing the newly formed entity to trade independently on a stock exchange. This strategy enables the spun-off or unbundled entity to raise funds from public investors through the issuance of shares. By accessing more capital, the separate entity can finance its growth initiatives, invest in new projects, or pursue strategic acquisitions.

Here are a few examples in the local market and offshore markets:

• Last year, Kellogg’s separated into two entities, with the parent company renamed to Kellanova (snacking business) and its cereal division becoming WK Kellogg Co last year.
• Transaction Capital is currently proceeding with the unbundling of WeBuyCars, preparing to list it on the JSE.
• Pick N Pay Stores Ltd intends to undergo a rights offer and list Boxer, a South African discount supermarket, while retaining its share in the business. 
• RCL Foods intends to unbundle and list its poultry business, Rainbow Chicken.

Moreover, during corporate actions like spin-offs, unbundling, demergers, split-ups, and separate listings, investors may receive shares in newly listed companies at a ratio reflective of these actions.

When it comes to dual/secondary listing and IPO (Initial Public Offering):

Dual listing expands a company's shareholder reach by listing its shares on multiple exchanges concurrently, bolstering visibility across various markets. A dual listing entails listing on two or more primary exchanges, while a secondary listing involves listing the same stock on exchanges other than the primary one.

An IPO (Initial Public Offering), on the other hand, is the process by which a private company offers shares of its stock to the public for the first time, thus becoming a publicly traded company. Through an IPO, the company raises capital by selling shares to investors, and in return, investors become partial owners of the company. Once the IPO is completed, the company's shares are traded on a stock exchange, where investors can buy and sell them on the exchange.

Here are a few examples of companies planning to list this year:

• In 2021, Coca-Cola announced plans to list its African bottling operations on Euronext Amsterdam, with a secondary listing on the JSE. This is reportedly expected to happen later this year.
• The social media company Reddit filed for its IPO on the NYSE under the symbol “RDDT” in February.
• Chinese retailer Shein is reportedly planning to list on the UK markets, as it believes that the US listing is unlikely to be approved.

The IPOs currently available for investors to participate in include a structured product from Investec and Cilo Cybin Holdings Limited. 

Currently, EasyEquities only offers access to the Johannesburg Stock Exchange IPOs (Initial Public Offering); these can be found under "New Listing" in one’s EasyEquities account. Newly listed shares from offshore markets are usually available after listing, depending on their liquidity and investor interest.

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