B&M Advances on Market Debut After IPO Raises $1.7 Billion

B&M European Value Retail SA, the U.K. discount retailer chaired by former Tesco Plc boss Terry Leahy, rose on its London trading debut after owners including private-equity firm Clayton Dubilier & Rice LLC raised more than 1 billion pounds ($1.7 billion) from an initial public offering.

The stock rose as much as 5.6 percent from the 270 pence IPO price and traded at 283.25 pence at 9:27 a.m., valuing the Liverpool, England-based retailer at about 2.8 billion pounds.

The IPO raised at least 1.08 billion pounds, of which B&M will get 75 million pounds, the company said in a statement today. Total proceeds may rise to as much as 1.19 billion pounds if an over-allotment option is exercised in full.

The selling shareholders include Chief Executive Officer Simon Arora and his brothers Bobby and Robin, who acquired the discount retailer in December 2004. Since then, the company has increased sales to about 1.3 billion pounds. Clayton Dubilier & Rice acquired a “significant stake” about 18 months ago.

B&M is the latest in a line of U.K. retailers that have listed stock in 2014, marking the busiest year in the industry since 2006, data compiled by Bloomberg show. Pets at Home Group Plc, online appliance company AO World Plc and Poundland Group Plc, a direct competitor of B&M, are among retailers that have raised about 5 billion pounds through IPOs this year.

Online retailer MySale Group Plc today also announced its debut on London’s AIM, pricing its shares at 226 pence each for a market capitalization of about 340 million pounds.

Pets at Home

“The success of the B&M and MySale IPOs seems to show that the retailing IPO market is still alive,” Nick Bubb, an independent retail analyst in London, wrote in a daily note.

Pets at Home, whose shares have fallen since the company’s March IPO, today reported an 11 percent increase in annual sales to 665.4 million pounds and said it’s “comfortable” with analyst estimates for the coming year. The shares, sold at 245 pence in the IPO, rose 1.5 pence to 218.5 pence at 9:27 a.m.

Also today, online fashion retailer Boohoo.com Plc said sales rose 63 percent to 109.8 million pounds in the year ended Feb. 28 in its first results since a March IPO. The shares gained 2 pence to 48 pence, below the 50 pence IPO price.

B&M’s IPO marks a return to the stock market for Leahy, who stepped down as CEO of Tesco in 2011. Tesco’s market share has shrunk since Leahy’s departure as the U.K.’s biggest grocer has succumbed to increased competition from discount retailers. B&M has delivered “impressive growth” as a private company and has “much more to come,” Leahy said in a statement last month.

B&M had 373 U.K. stores as of March 29, selling everything from televisions to lawnmowers and bed linen.

Goldman Sachs Group Inc. and Bank of America Merrill Lynch managed the sale, along with Credit Suisse Group AG and Deutsche Bank AG. B&M was advised by Lazard & Co., while N.M. Rothschild & Sons Ltd. acted for the Arora family.

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