Top story Poundland owner Pepco is has set its price in the upcoming Polish IPO at a discount, valuing the budget retail chain at £5bn (GBP4.3bn).
Steinhoff, the South African parent company of Pepco, set the price of shares in the flotation at 40 zlotys a piece (EUR8.82). It puts the offer at the lower end of the range of 38 zlotys (EUR8.32) and 46 zlotys (EUR10.08), guided by the group earlier this month. Pepco will look to raise about EUR700m from the sale of more than 80 million existing shares in the IPO, but has room to sell up to 92.5 million if demand allows.
The discounter also sold a further 23 million shares to its lenders to raise additional funds of EUR200m. The free float will total 20.1% on admission to public markets, which is expected to be on 26 May. Pepco revealed last month it had opted to list on the Warsaw Stock Exchange rather than in London given its exposure to the Polish market.
The group, which operates as Pepco, Poundland and Dealz, has more then 3,200 stores located across 16 countries. Pepco CEO Andy Bond said: "We are proud to be joining the Warsaw Stock Exchange in what will be its biggest IPO to date in 2021 and to become one of the largest listed companies in Warsaw. Our group operates in the attractive European discount retail sector, and with our three market-leading brands - Pepco, Dealz and Poundland - we are extremely well positioned to take advantage of the enormous growth opportunities in front of us.
"We are pleased to have received strong interest and support from a broad range of high-quality international and Polish investors, including substantial retail demand, who have all recognised the quality of our financial track record and the substantial, long-term store growth opportunity that we can readily finance through our internally generated cash-flow." Morning update Elsewhere on The Grocer this morning, there are two stories about upcoming M&A in the industry.
Fresh from completing a EUR1.7bn buyout of Valeo, Bain Capital is leading the chase for Wagon Wheels and Jammie Dodgers maker Burton's Biscuits. The Boston-based private equity firm is among the final group of interested parties in the auction led by Stamford Partners, along with Biscuit International and Fox's owner Ferrero. Read the full story on thegrocer.co.uk here.
The auction for Gu Puds is also drawing to a conclusion, with PE firm Exponent close to completing a GBP150m deal. Former Quorn owner Exponent has a long history in the consumer space and currently holds dairy supplier Meadow Foods, East Asian food platform Vibrant Foods and snacks brands Proper and Eat Real. The PE firm has been a strong contender since the Gu auction, handled by corporate finance firm Spayne Lindsay, kicked off late last year.
Read the story here. The FTSE 100 has mounted a recovery once again to climb back above 7,000pts this morning. It is currently up 0.8% to 7,019.22pts.
Shares on the up this morning include, Greencore, rising 2.8% to 167.5p, Kerry Group, up 2.4% to EUR109.30, SSP Group, climbing 2.1% to 315.2p, and Pepco owner Steinhoff, which was up 2.1%. Earlier fallers include Delivery Hero, Bakkavor Group, Hellfresh and Danone. Yesterday in the City
The FTSE 100 suffered a 0.6% loss down to 6,963.33pts as inflation fears continued to stalk the market. There was little in the way of company news to influence food and drink shares yesterday, but many in the industry escaped the general negative investor sentiment. Kerry Group, CC&C Group, Deliveroo and M&S, led the fallers, down 2.3% to EUR106.70, 2.3% to 285p, 2.2% to 238.4p and 0.8% to 151.3p respectively.
The risers included McColl's Retail Group, up 3.2% to 36p, Stock Spirits Group, up 2.8% to 275.5p, AG Barr, up 1.4% to 522p, and Bakkavor, up 1.6% to 131.4p.
Ocado, Pets at Home, Premier Foods, Reckitt Benckiser, Unilever, Greggs, Hotel Chocolat, Hilton Food Group and Fevertree also escaped the gloom.