(Adds Poundland comparison, Lazard on deal)
By Freya Berry
LONDON May 22 British discount retailer B&M
is to list shares on the stock market, the
biggest of four companies to announce plans for London initial
public offerings (IPOs) on Thursday.
Several people familiar with the matter said that the
listing could value the company at anything from 2.5 billion
pounds ($4.2 billion) to in excess of 3 billion pounds.
London has seen a massive surge in activity in recent
months, with 30 companies raising $7.4 billion in the year so
far, up 163 percent on last year, according to Thomson Reuters
data last week.
Hungarian airline Wizz Air, property website Zoopla
and UK asset advisor River and Mercantile also
unveiled plans on Thursday for London IPOs.
B&M, which sells everything from trampolines to barbecues,
said it would raise gross proceeds of 75 million pounds ($126.6
"The reception we're getting is extremely encouraging. We
believe investors are attracted to the scarcity value (of
discount retailers)," said Chief Executive Simon Arora, one of
the two brothers who acquired the chain in 2004.
"To put it bluntly, you can't buy shares in Aldi or Lidl."
Arora said that the company was targeting 850 stores across
the UK, from 373 at the end of its last financial year, and
would open around 40 stores annually.
B&M has been owned by US private equity fund Clayton
Dubilier & Rice since 2012 and had adjusted earnings before
interest, tax, depreciation and amortisation (EBITDA) of 130
million pounds in the year to the end of March.
The plans for listing come two months after UK discount
chain Poundland floated in London.
Poundland has over 500 UK and Ireland stores. It is
currently trading at almost 26 times EBITDA, although its shares
have slid since their strong first-day opening performance.
A valuation of 3 billion pounds would give B&M a multiple of
23 times EBITDA.
B&M's board is chaired by former Tesco chief Terry Leahy.
The company has appointed a raft of executives including Thomas
Hubner, former CEO of Metro AG's Cash and Carry business.
This year the company acquired a German subsidiary, JA Woll,
which Arora said would continue to grow at its current pace of
around two stores a year.
B&M's listing is being run by Goldman Sachs and Bank
of America Merrill Lynch. Credit Suisse and
Deutsche Bank are acting as joint bookrunners. Lazard
($1 = 0.5925 British Pounds)
(Editing by Clare Hutchison and Pravin Char)