B&M Retail bags £1.1bn to buck market gloom

Michael Bow
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B&M RETAIL yesterday shook off the gloom in the new issues market to debut the biggest stock market flotation in London since Royal Mail.

The budget chain, chaired by former Tesco boss Sir Terry Leahy, raised £1.1bn by selling 40 per cent of the company to City investors.

Shares rose in informal trading to close up 5.6 per cent at 285p, having been priced at 270p – putting it on the cusp of the FTSE 100 with a market cap of £2.9bn.

The listing is the largest amount of cash ever raised on the London stock market in sterling by a retailer and the biggest retail flotation on earth since Prada raised $2.5bn (£1.5bn) in 2011, according to data from Dealogic.

Royal Mail raised £1.7bn in October 2013.

Private equity backer Clayton Dubilier & Rice (CDR), which bought the firm only two years ago, will cut its stake from 52 per cent to 31 per cent through the share sale.

Part of the proceeds – approximately £75m – will be used by the company to pay down debt.

The firm is run by Simon Arora, a former McKinsey consultant and alumnus of Barclays and 3i, whose family own about 30 per cent of the business. They will cut their stake to about 27 per cent.

The business was founded in 1978 by shopkeeper Malcolm Billington in the seaside resort of Blackpool in the north of England.

B&M is one of the few retail floats to stay above water on its first day.

A host of floats, including Pets at Home and Card Factory, are below their issue price.

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