* IPO for Rebel Group was shelved last year
* Super Retail takes advantage of weak retail environment
* Super Retail plans rights offering to part-fund deal
By Victoria Thieberger
Oct 17 (Reuters) - Australian auto products chain Super Retail Group agreed to buy top sports retailer Rebel Group for A$610 million ($630 million) from one of the country’s largest buyout firms, capitalising on the weak retail environment to pick up a quality asset.
Rebel Group’s owner Archer Capital had originally planned to float the Rebel Sports chain, which has 128 stores across Australia and a 24 percent market share, but shelved the IPO last year as the retail market weakened.
There has only been one private-equity IPO in Australia in the past two years -- Collins Foods -- after the market soured following the poor performance of Myer Group .
Myer, sold by TPG , has never traded above its IPO price of A$4.10. It was trading at A$2.25 Monday morning.
Buyout firms have been relying on trade sales and deals with other private equity firms to exit the backlog of investments they made during the boom years up to 2007.
“For Archer, it is a good opportunity for them to exit Rebel and for Super to pick up a really good chain and bolt it on, and it is accretive,” said Peter Esho, analyst at City Index.
“Maybe it is a sign there is a bit more corporate confidence out there to do deals,” Esho said.
Super Retail owns the Ray’s Outdoors camping stores and Supercheap Auto chains.
Australian consumers sharply slowed their spending late last year following a string of aggressive interest rate hikes, and sentiment remains soft on worries about the economic outlook.
“It is an attractive entry point with the retail cycle currently at a cyclical low,” Super Retail said in a presentation.
The deal will boost Super Retail’s revenues to about A$1.6 billion, with Rebel sales contributing about A$630 million.
Super Retail said the acquisition would boost earnings per share in the current fiscal year and was a strong strategic fit.
It plans to increase the number of Rebel stores from 128 to 185 over the medium term.
Super Retail, with a market capitalisation of A$860 million, plans to part fund the deal through a 9-for-19 rights offering at A$5.34 a share to raise A$334 million.
That is an 18 percent discount to the last traded price of A$6.50.