October 10, 2017 / 9:34 AM / 3 years ago

Ready meals firm Bakkavor prepares $2 billion London listing

LONDON (Reuters) - Ready meals supplier Bakkavor plans to list at least a quarter of its shares on the London Stock Exchange in early November, in a deal that sources say could value it at up to 1.5 billion pounds ($2 billion).

The company, which counts Marks & Spencer (MKS.L), Waitrose and Tesco (TSCO.L) as major customers, said on Tuesday it aimed to raise around 100 million pounds from issuing new shares and would also sell part of the stakes held by U.S. hedge fund Baupost and Icelandic founders Agust and Lydur Gudmundsson.

London is seeing a pick up in listings, with this year’s total already far outpacing 2016 when volatility caused by Britain’s vote to leave the European Union caused a number of initial public offerings (IPO) to be postponed or canceled.

Over the past week, half a dozen companies have announced plans to list on London’s main market, between them aiming to raise as much as $3.7 billion, compared with around $4 billion in the third quarter.

These include Dutch business services firm TMF Group and Russia’s En+ Group, which is launching an IPO in London and Moscow, testing investors’ appetite for Russian assets three years after Western countries imposed sanctions on Moscow over its role in the Ukraine crisis. [nASM000ER2] [nL8N1MG0Q3]

Bakkavor, which is using the IPO to reduce its leverage and make more investments, generated revenues of almost 1.8 billion pounds and pretax profits of 63.1 million pounds last year.

It started as a cod roe manufacturer and exporter before the Gudmundsson brothers expanded the business with acquisitions financed with debt, borrowings that meant the company was swept up in Iceland’s financial crisis before it eventually restructured and attracted new investors. [nL8N1MD5FR]

The company has also appointed Simon Burke as its independent non-executive chairman, replacing Lydur Gudmundsson, who co-founded the business 31 years ago and will remain a non-executive director.

Burke, a former accountant, was previously the chairman and chief executive of Hamleys, the world’s oldest toy shop which under his leadership was sold to Icelandic firm Baugur in 2003. Baugur later collapsed and Hamleys is currently owned by Chinese retailer C. Banner.

HSBC (HSBA.L) and Morgan Stanley (MS.N) are leading the IPO process. Barclays (BARC.L), Citigroup (C.N), Rabobank and Peel Hunt are also working on the deal.

($1 = 0.7594 pounds)

Reporting by Clara Denina; Editing by Rachel Armstrong and Mark Potter

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