Directors of Midland retailer Poundland are set for a major windfall with its flotation valuing the group at £750 million.
The Willenhall-based cut-price retailer has confirmed investors will have pay 300p a share its initial public offering.
The offer is expected to raise gross proceeds of around £400 million and institutional support for the flotation has been considerable with the issue rumoured to have been 10 times oversubscribed.
Selling shareholders comprise funds advised by Warburg Pincus together with certain directors, members of senior management, the ESOP trustee and other individuals. The company will not receive any proceeds from the offer.
At admission, Poundland will have 250 million shares in issue with half “free floating” – meaning they are readily available in the market.
Following the offer, the Warburg Pincus Funds will own 37.9 per cent of the company, with Poundland directors and members of senior management taking a 10.2 per cent stake.
Jim McCarthy, Poundland chief executive, said: “I’m very pleased to welcome our new shareholders to Poundland. The combination of a track record of delivering strong, profitable growth underpinned by a well-invested infrastructure and a compelling growth story has attracted overwhelming support for Poundland’s IPO.
“We look forward to continuing to deliver, as a listed company, Poundland’s mission to provide our customers with amazing value every day.”
The IPO will mean a major pay day for advisers and 155 senior managers of Poundland, who own a 25 per cent stake that could be worth close to £190 million.
The majority belongs to nine directors, MrMcCarthy, who made £5 million when US private equity Warburg Pincus bought its 75 per cent stake for £200 million four years ago.
Poundland is the largest single price value general merchandise retailer in Europe by both sales and number of stores. The Willenhall-based group opened its first store in 1990 and has grown to operate a network of over 500 across the UK and Ireland.
Admission to the premium listing segment of the London Stock Exchange is expected on March 17.