Poundland yesterday placed £50m worth of new shares to fund its purchase of 99p Stores.
The shares, which represent approximately 7.1 per cent of the company’s existing share capital prior to placing, were placed with institutional investors at 280p, which will be worth 275p to the company after expenses.
JP Morgan Cazenove acted as sole bookrunner on the deal, with Shore Capital as co-lead manager. The shares were sold in just under seven hours.
The company was given clearance by the competition watchdog for its £55m takeover of the 99p stores on 18 September, and expects to complete on the 28 September.
Poundland said that although it would increase its store count by 40 per cent, with the addition of 99p stores “indications are that 99p Stores’ financial position has weakened somewhat since our original due diligence”.
The company’s like-for-like sales fell 2.9 per cent in the 25 weeks to 20 September, but it said it expected a stronger performance over Halloween and Christmas periods.