Financial News

  • 18 December 2013, 11:13

Superdrug Parent Picks Banks For 15bn Float

The owner of Superdrug, Britain's second-largest specialist health and beauty retailer, has picked a trio of banks to oversee a stock market flotation that could involve a secondary listing in London.

Sky News has learnt that Hutchison Whampoa, the Hong Kong-based conglomerate, has appointed Bank of America Merrill Lynch, Goldman Sachs and HSBC to manage a share sale of its AS Watson division during 2014.

The listing is likely to be jointly in Hong Kong and London, although no firm decision has been made about the UK component, with Singapore also competing to secure a slice of one of the world's largest retail sector offerings for years, insiders said on Tuesday.

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

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 by some measures the largest single inward investor 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 reportedly 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.

One person close to the situation said that recently-announced rule changes could make a London flotation more complicated for Hutchison Whampoa.

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, and is expected to have a successful Christmas trading period, according to industry observers.

A Hutchison spokesman could not be reached for comment on Tuesday.

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