(Corrects price range in third paragraph from 625-750 pence)
* Poundland shares list at 300 pence, rise up to 33 pct
* Pets at Home shares list at 245, rise up to 4.6 pct
By Freya Berry and James Davey
LONDON, March 12 Shares in discount retailer
Poundland made a strong debut on the London Stock
Exchange on Wednesday, with the price jumping 33 percent to
nearly four times the one-pound price tag it puts on all its
merchandise, valuing the business at 998 million pounds ($1.7
Shares in the company, one of several British retailers
looking to list in London this year and capitalise on the
country's gradually improving economy, were trading at 396.6
pence at 1243 GMT, well above the 300 pence flotation price
which had valued the firm at 750 million pounds.
Last month Poundland had set the price range for the share
offer at 250-300 pence to value the company at 625-750 million
Private equity firm Warburg Pincus reduced its 76
percent stake in the operator of over 500 stores, which sells
items for 1 pound, to 37.9 percent, or 30.4 percent if an
over-allotment is exercised.
Some 50 percent of the firm's equity will be freely
Poundland's management led by Chief Executive Jim McCarthy,
a 30-year veteran of the retail sector, reduced their holdings
from about 24 percent to 10.2 percent.
Poundland, the first British discount retailer to seek a
public listing, did not issue any new shares to investors in the
offer, which raised gross proceeds of 375 million pounds.
A source familiar with the matter said the offer was covered
over 15 times and that Warburg Pincus, which bought Poundland
for 200 million pounds in 2010, saw an internal rate of return
(IRR) of over 50 percent, and a money multiple of 4.5 times on
PETS AT HOME
Separately on Wednesday Britain's biggest pet shop group
Pets at Home priced its share offer at 245 pence,
giving a debut market capitalisation of 1.225 billion pounds.
Its shares hit a high of 256.25 pence, up 4.6 percent.
The firm, which had set a price range of 210-260 pence last
month, is raising 280 million pounds, with major shareholder KKR
, the U.S. private equity group, other shareholders and
members of the management team receiving 210 million pounds.
Following the listing KKR will hold 46.2 percent of the
equity, while management led by Chief Executive Nick Wood will
hold 4.3 percent. Some 40 percent of its issued share capital
would be freely tradable
Wednesday's flotations follow last month's listing in London
of AO World, the online domestic appliances retailer,
which saw a surge in its share price above its offer level on
Several other British retailers are seeking listings as
consumer confidence improves, including Fat Face, B&M and House
of Fraser expected to come to market.
JP Morgan and Credit Suisse were bookrunners on the
Poundland sale, while Bank of America Merrill Lynch, Goldman
Sachs and KKR Capital Markets led the Pets at Home offer.
($1=0.6014 British Pounds)
(Editing by Mark Potter and Greg Mahlich)