Investors in last minute dash to grab Poundland
BUDGET chain Poundland will close the books on its forthcoming London float tomorrow night, with a late surge in demand meaning the offer could end up 10 times oversubscribed.
The high street store has so far seen solid demand from institutional investors keen to buy shares, helping back an early decision by the firm not to pursue a retail offering on the deal.
Bankers running the flotation, led by bookrunners JP Morgan and Credit Suisse, narrowed the range on Friday to between 280p and 300p, with expectations the offer will price at the maximum 300p per share – valuing Poundland at about £750m.
The deal is currently about five times oversubscribed but it is expected that this could almost double between now and tomorrow evening as investors stage a late rush to buy shares. The final price is set to be unveiled to the market either tomorrow night or Wednesday morning.
Insiders said it would be “highly unusual” to hike the upper end of the range beyond 300p due to the limits already being set for investors.
Poundland chief executive Jim McCarthy had originally looked into a retail offering but bankers working on the deal advised that it would have been too complicated to pull off due to its size.
Large floats such as last year’s £3.3bn initial public offering of shares in Royal Mail and the proposed £1.5bn IPO of Pets at Home this month have been able to sustain retail tranches.
Poundland’s private equity owner Warburg Pincus is selling part of its 75 per cent stake in the float but there is no new money being raised for the company – meaning just a few hundred million pounds worth of equity is on offer.