Flotation Flurry As Retailers Catch Tide

Post date: Mar 12, 2014 5:25:23 PM

Reuters Business Report - Where everything's a pound - apart from its shares..

Poundland has set the price for its initial public offering at 300 pence a share, the top of its initial price range.

It's Europe's largest single price retails - selling everything from confectionary to cleaning products - and it's secured its place as a high-street hit during the recession.

Paulette Rawlings, Poundland shopper,

"You can find what you want from baking foil to cake dishes."Ravis Gjini, Poundland shopper,

"Everything that we need for the house. Everything is cheap here, it's nice."

Brenda Bird, Poundland shopper,

"Bits you don't find in other shops, together, and it's always well set out."

Poundland has also gone down well with investors.

Reportedly there was a lot of demand for the shares - which value the company at £750 million.

Poundland is the first discount retailer to look to a listing.

PTC

Three pounds buys you three bars of chocolate in this shop, or one of Poundland's shares.

During the recession, discount retailers like Poundland did well, and supermarkets Aldi and Lidl are still growing their market share.

Now after the recession, it seems discount retailers like Poundland are here to stay.

Their appeal isn't just about the prices, says Stephen Springham from Planet Retail.

Stephen Springham, Senior retail analyst, Planet Retail,

"They're very well-run retail operations, by that I mean the stores look very good, I mean obviously there is a discount element there, but the stores are anything but shoddy, you know, they are very well-merchandised, they are very well fitted out, and the product is there that people want at a price they can afford."

Poundland's not the only retailer tempted to market.

Convenience store McColl's has already listed, while Pets at Home has also set the price for its IPO.

Shares in online fashion retailer boohoo.com are due to start trading shortly.

And Fat Face, B&M and House of Fraser are some other store groups expected to come to market.

There are several reasons behind the IPO resurgence, says Taron Wade from Standard and Poor's.

Taron Wade, Corporate Research Team, Standard & Poor's,

"We have seen equity valuations improve, so you know investors look at the companies and say well 'we believe there's more growth potential in this companies' so that's the first thing. The second thing is that there's been a lot of pent-up demand from private equity sponsors who have invested in these companies and they really haven't had access to the capital markets to exit their transactions, so they're taking the opportunity while investors are interested to exit. And then the third third reason is that overall we're just seeing an imporvement in sentiment, investor sentiment, the economy is starting to improve inEurope."

Poundland plans to almost double its number of UK stores to 1000 in the next 6 years - and open more in Ireland.

It's also turning its attention to Spain and will open 10 new stores there.

Question is, what will Poundland be called in a country which uses the euro.

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at Home set the prices for their initial public offerings (IPOs) on Wednesday, the latest British retailers to capitalise on London's buoyant market conditions.

Pets at Home will float shares at 245 pence apiece, in the middle of its initial price range, and giving the company a market capitalisation of 1.2 billion pounds ($2 billion).

The company is mainly owned by U.S. private equity group KKR and run by Chief Executive Nick Wood, a former CEO of American Golf and himself the owner of two dogs and Snuggles the hamster.

Europe's biggest single-price retailer Poundland <PLND.L>, which sells everything from Cadbury's chocolates to Coca-Cola soft drinks for just a pound, set the price of its IPO at 300 pence a share, the top of its initial price range, and valuing the company at 750 million pounds.

A source familiar with the matter said that demand had been high, with the books covered over fifteen times.

Poundland's flotation would raise 375 million pounds and see private equity firm Warburg Pincus reduce its stake in company to 37.9 percent, or 30 percent if an over-allotment is exercised.

American Golf and himself the owner of two dogs and Snuggles the hamster.

The store secured its place as a high-street hit during the recession.

It's the first discount retailer to look to a listing.

PTC

Three pound would buy you tubes of toothpaste in a POundland store, or one fo their shares ......

You could buy three .... tubes of toothpaste - for the same price as one of Poundland's shares.

The stores stock everything from cleaning products to camping equipment xxxx

Sign of the times or a new retail trend?

Just last year, there was concern about the future of high streets, as the some retailers collapsed during the recession.

Poundland was one to benefit when Brits tightened their belts.

Poundland's not the only British retailer tempted to market by the country's gradually improving economy.

Several others are also seeking listings.

Convenience store McColl's has already listed, while Pets at Home has also set the price for its IPO.

Shares in online fashion retailer boohoo.com are due to start trading shortly.

And Fat Face, B&M and House of Fraser are some of the other store groups expected to come to market.

Taron Wade from Standard and Poor's says xxxxx is behind the resurgence of IPOs.

POUNDLAND/BRIEF (URGENT) (UPDATE 1)

UPDATE 1-Poundland and Pets at Home set listing prices

(Adds detail on companies, ownership, banks)

By Freya Berry

LONDON, March 12 (Reuters) - Poundland and Pets at Home set the prices for their initial public offerings (IPOs) on Wednesday, the latest British retailers to capitalise on London's buoyant market conditions.

Pets at Home will float shares at 245 pence apiece, in the middle of its initial price range, and giving the company a market capitalisation of 1.2 billion pounds ($2 billion).

The company is mainly owned by U.S. private equity group KKR and run by Chief Executive Nick Wood, a former CEO of American Golf and himself the owner of two dogs and Snuggles the hamster.

A source familiar with the matter said that demand had been high, with the books covered over fifteen times.

Poundland's flotation would raise 375 million pounds and see private equity firm Warburg Pincus reduce its stake in company to 37.9 percent, or 30 percent if an over-allotment is exercised.

Britain's retail industry is set for a flurry of offerings this year. AO World floated in February, while Boohoo.com, B&M and House of Fraser are also expected to come to market.

JP Morgan and Credit Suisse are bookrunners on the Poundland listing, while Bank of America Merrill Lynch, Goldman Sachs and KKR Capital Markets are leading the Pets at Home listing.

($1 = 0.6014 British Pounds) (Reporting by Freya Berry; Editing by Mark Potter) ((freya.berry@thomsonreuters.com)) Keywords: POUNDLAND/BRIEF