Financial News

  • 6 February 2014, 4:21

Superdrug Parent Mulls UK HQ Move To Aid IPO

The world's biggest health and beauty retailer is examining a relocation of its headquarters to the UK as part of a tentative plan to list its shares on the London Stock Exchange.

Sky News has learnt that AS Watson is considering the idea as it assesses whether to pursue a joint primary listing in Hong Kong and London.

Under rules supervised by the UK Listing Authority, transferring its corporate headquarters to Britain would make it easier to qualify for a premium listing of its shares.

AS Watson is the world's biggest health and beauty retailer, with interests in 33 countries through a network of more than 11,000 shops. As well as Superdrug, it owns The Perfume Shop, the UK's biggest fragrances retailer.

Sky News revealed in December that Hutchison Whampoa, the Hong Kong-based conglomerate behind AS Watson, had appointed Bank of America Merrill Lynch, Goldman Sachs and HSBC to manage a share sale of the retail division during the course of this year.

No firm decision has been made yet about the listing, with Singapore also competing against London to secure a slice of one of the world's largest retail sector offerings for years, insiders said.

Insiders said on Wednesday that AS Watson was considering approaching Lord Davies, the former trade minister, or Sir John Bond, former chairman of Vodafone and XStrata, about taking on its chairmanship if it pursues the London flotation.

Such a move would also be likely to benefit the Exchequer through additional corporate tax payments.

Hutchison, which is run by the octogenarian Li Ka-shing, Asia's wealthiest man, had previously been considering a sale of Park'n'Shop, the Hong Kong grocery chain that is one of AS Watson's largest individual businesses.

However, Mr Li abandoned the auction after prospective buyers failed to meet his apparent $4bn (2.5bn) asking price.

Hutchison is one of the biggest inward investors in the UK, with interests in ports, mobile communications and - through its sister company Cheung Kong Infrastructure Holdings - water supply and other utilities.

A London listing of AS Watson, which could value the company at as much as $25bn (15bn), would be a major boost to UK capital markets following an intense debate about the quality of foreign companies which have listed their shares on the London Stock Exchange.

Mining groups such as ENRC and Kazakhmys triggered a row about governance standards which prompted the UKLA to tighten the rules on London share sales.

AS Watson was established in 1828 as a platform for providing free medicines to the poor of Guangdong, a province in southern China.

Superdrug, which operates nearly 900 shops in the UK and Ireland, trails only Boots in the market for health and beauty products.

A Hutchison spokesman could not be reached for comment.

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