Financial News

  • 13 March 2014, 8:31

Poundland And Pets At Home Share Trades Begin

Conditional trading is underway in Poundland and Pets At Home shares, with offer prices valuing the businesses at a combined total of almost £2bn.

Europe's biggest single-price retailer, Poundland, set the price of its Initial Public Offering (IPO) at 300p a share, the top of its initial price range, valuing the company at £750m.

A source has suggested the offer was 15-times over-subscribed.

Its flotation would raise £375m, the company said, and see private equity firm Warburg Pincus reduce its stake.

Poundland's shares rose more than 15% in early conditional trading while Pets At Home stock slipped just below its offer price, dealers said.

Pets at Home confirmed it was floating shares at 245p apiece, in the middle of its initial price range, giving the company a market capitalisation of £1.2bn.

The sale of 40% of the firm is expected to raise £280m to help cover its debts.

The company is mainly owned by US 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 a hamster called Snuggles.

He said: "Pets At Home has enjoyed strong growth for over a decade and we are now ready to move on to the next stage of our development as a listed business."

Ishaq Siddiqi, market strategist at ETX Capital, said of the flotations: "Taken together, both IPO debuts will be seen as a success, as retail investors were given the opportunity to be involved in the IPOs.

"Both these companies are consumer facing, so highly popular in the UK."

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.

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