Hargreaves Lansdown

Poundland to float at top end of price range

Wed 12 March 2014 07:14 | A A A

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UK discount chain Poundland has set the price of its planned flotation at the top of its expected price range, making it worth 750m pounds.

The group, which has more than 500 shops in the UK selling products for £1 each, said it had priced its initial public offering (IPO) of 125m shares at 300p per share.

The sale is set to raise £375m assuming no exercise of an over-allotment option, and £431m assuming full exercise.

Majority owner, private equity firm Warburg Pincus, management and others are selling parts of their stakes, but the company will not receive any proceeds.

After the offer, Warburg will own 37.9% of the group and Poundland directors and members of senior management will own 10.2%.

Conditional dealings in the group start today and unconditional trading is expected to start this coming Monday.

The float is the latest in a spate of IPOs including insurers Esure and Direct Line, housebuilder Crest Nicholson and UK postal operator Royal Mail.

Poundland has cashed in on growing demand for discounted household goods from consumers facing pressure after the credit crunch.

It said it expected that demand will continue regardless of any economic upturn as consumers have become more price-conscious.

Poundland's Chief Executive Jim McCarthy said: "The combination of a track record of strong, profitable growth underpinned by a well-invested infrastructure and a compelling growth story has attracted overwhelming support for Poundland's IPO."

Poundland entered Ireland in September 2011 under the Dealz brand, where it sells most of its products for €1.49, and is considering opening elsewhere in Europe.

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