B&M ‘to be valued at £2.9bn in IPO’
DISCOUNT retailer B&M is to be valued at up to £2.9bn in its stock market flotation, according to reports.
Such a valuation would make the Speke company among the largest in a clutch of retail listings this year.
According to Reuters, the chain, which sells everything from food and drink to hanging flower baskets and beds, has set its price range for IPO at 230-290p a share.
The price range gives B&M, which has been majority-owned by US private equity firm Clayton Dubilier & Rice since 2012, a market value of between £2.3bn and £2.9bn.
The listing will test what appetite remains for new share offerings by retail companies. A string of firms including locally AO World and Pets at Home have already floated this year, but niche clothing chain Fat Face last month pulled its planned £110m offer.
Fat Face cited market conditions for pulling the listing, while analysts suggested private equity owner Bridgepoint was seeking too high a price.
B&M’s offer valuation gives the company a multiple of 22-27.7 times the firm’s forecast earnings to March 2015, Reuters’ sources said.
The company, which is chaired by former Tesco chief executive Sir Terry Leahy, has said it had adjusted EBITDA of £130m in the year to 29 March 2014.
The company now operates more than 370 stores across the UK but chief executive Simon Arora has said the aim is to now expand at a rate of around 40 new stores a year.
Shares in Poundland, the 500-store discount chain operator which floated two months ago, were trading at 352p a share today, up from their debut price of 300p and at almost 26 times forecast earnings.
The B&M offer is being run by Goldman Sachs and Bank of America Merrill Lynch. Credit Suisse and Deutsche Bank are acting as joint bookrunners. Lazard is advising.
B&M declined to comment.
