Poundland, Pets At Home Price London IPOs

LONDON (The Deal) -- Two private equity-backed U.K. retailers priced their IPOs on Wednesday, March 12. Discounter Poundland Group achieved the maximum valuation in an offering worth 375 million pounds ($623.6 million) before a greenshoe, while Pets at Home Group priced at the upper end of an indicative range to raise 490 million pounds for the company, Kohlberg Kravis Roberts & Co. and other selling shareholders.

The IPOs are the latest in a series of successful London offerings by private equity-backed companies, which started with a trickle of construction and real estate-related companies in spring last year and has in recent months been dominated by retailers. Conditional dealings started in both companies' shares on Wednesday, with Poundland rising sharply above its 300 pence IPO price to 367 pence and Pets at Home unchanged at the IPO price of 245 pence on Wednesday morning.

Poundland's "base" offering comprised 125 million existing shares, mainly sold by Warburg Pincus LLC, which will cut its stake to as little as 30.4% from 76% if it uses a greenshoe. The 300 per-share price was at the top of an indicative range that started at 250 pence and will give Poundland a market value of £750 million.

Poundland's fast growth and a respected board led by former Tesco plc CFO Andrew Higginson, as chairman, proved a lure to investors. Warburg Pincus and management had set a conservative minimum 25% target for the amount of the company they aimed to sell, giving them plenty of flexibility to respond to demand without losing face - or exit profits.

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