Pick n Pay is free

Pick n Pay’s market cap is significantly lower than the value of its 65.6% stake in Boxer, which means essentially you get Pick n Pay Stores for free if you buy the stock.

Pick n Pay used to own 100% of Boxer, South Africa’s leading soft discount retailer. For years, it has been the crown jewel of the Pick n Pay Group.

Boxer was founded in KwaZulu-Natal in 1977 and operates over 500 stores across South Africa and Eswatini.

The retailer has produced consistently strong returns. This includes 19% annualised sales growth and a 27% return on invested capital.

Unlike Pick n Pay, which has been closing stores as part of its turnaround strategy, Boxer continues to grow, opening over 60 new stores annually.

Pick n Pay would have loved for Boxer to remain one of its wholly owned subsidiaries. However, it had to sell a 34.4% stake to sort out its debt burden.

Through Boxer’s initial public offering (IPO), Pick n Pay raised R8.5 billion, which adequately covered the group’s debt obligations.

After Boxer’s IPO and listing on the JSE, Pick n Pay owned a 65.6% stake in the retailer.

Boxer has a market cap of approximately R32 billion, which means that Pick n Pay’s stake is worth R21 billion.

Pick n Pay’s market cap, in comparison, is R16 billion. This means that its share in Boxer is R5 billion more than its total market cap.

What this means, in simple terms, is that the market thinks that the rest of Pick n Pay is less than worthless.

It is actually seeing Pick n Pay’s business as negative, as it is unclear how much money it will take to turn the company around and whether the turnaround will be successful.

This is why some analysts are bullish on Pick n Pay, as it offers investors significant upside should CEO Sean Summers succeed with his strategy.

Analyst opinion about Pick n Pay

FNB Wealth and Investments’ head of investment research, Chantal Marx, said the Pick n Pay discount is unfair.

She said the fact that the market price for Pick n Pay implies minimal or no value for the rest of the business is misguided.

She argued that this was unfair, as the core Pick n Pay business, while struggling, still has significant turnover and turnaround potential.

All Weather Capital chief investment officer Shane Watkins shared Marx’s view, saying Pick n Pay can be a good investment.

In October 2025, he explained that Pick n Pay achieved a better gross margin and there is better visibility on its longer-term targets.

He viewed the fact that shareholders discounted Pick n Pay stores and all the related assets to less than zero as an investment opportunity.

“You are getting R4 billion in cash, 800 stores, Pick n Pay Liquor and Pick n Pay Clothing for free,” Watkins said. “The market and the share price are telling us that all of Pick n Pay’s other assets are worth nothing.”

Watkins said that, by investing in Pick n Pay, people will get free optionality that Summers will fix the business, which is likely to happen.