LONDON (Alliance News) - Discount retailer Poundland PLC and pets product retailer Pets at Home Group PLC both priced their initial public offerings on Wednesday and are set to start conditional dealings.
Poundland priced its initial public offering at 300 pence per share, valuing the company at GBP750 million. Poundland, which is the largest of several discount retailers that are becoming omnipresent on the UK's high streets, has a key price point of GBP1 in its UK stores, or EUR1.49 in Ireland. It only opened its first store in 1990 and now has over 500 across the UK and Ireland.
The discount retailer said it has raised GBP375 million in funds, assuming no exercise of the over-allotment option, and GBP431 million assuming exercise in full of the over-allotment option. It wants to use the funds to finance its big expansion plans, believing it has the potential to have more than 1,000 stores in the UK alone in the longer term. It is also planning expansion into continental Europe, with a trial of up to 10 of its Dealz stores in Spain over the next two years. It currently trades as Dealz in Ireland.
Following the offer, US private equity firm Warburg Pincus will own 37.9% of the company assuming no exercise of the over-allotment option, and 30.4% assuming exercise in full of the over-allotment option. Poundland's directors and members of senior management will own 10.2% of the company's share capital.
Meanwhile, Pets at Home set its IPO price at 245 pence, giving it a total market capitalisation of GBP1.23 billion. The retailer said it raised around GBP280 million as a result, funds it will use to cut its debts and expand the business. The IPO also will give private-equity owner Kohlberg Kravis Roberts, which bought Pets at Home in 2010 for around GBP955 million, a return on its investment.
The two retailers are the third and fourth British retailers this year to float on the London Stock Exchange, following IPO's from newsagent and convenience store chain McColl's Retail Group PLC and online appliance retailer AO World PLC.
The list for upcoming flotations in the retail sector also continues to grow, with online fashion retailer Boohoo.com having announced that they intend to IPO in coming months, while media have reported that a host of other retail businesses are set to float sometime this year, including discount retailer B&M, department store operator House of Fraser, phones retailer Phones4U, and fashion retailer Fat Face.
Earlier in the week, Indian online fashion retailer Koovs PLC listed on AIM with an initial market capitalisation of about GBP36.2 million and quickly shot higher. The online retailer raised GBP22.0 million by placing 14.7 million shares, money that will be used to build stock, increase marketing and fund operating losses as the business continues its rapid growth.
Koovs' chairman is British multi-millionaire media entrepreneur and politician Lord Waheed Alli, who was chairman of ASOS until November 2012. He founded the company along with former ASOS product developer Robert Bready.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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Pets at home (PETS)