SSP Climbs After Food Outlet IPO Prices at Low End of RangeJanice Kew
SSP Group Plc, the U.K. operator of about 2,000 food outlets including Upper Crust sandwich shops at airports and rail stations, rose after pricing its initial public offering at the lower end of an indicative price range.
The shares traded at 222.75 pence at 8:58 a.m. in London, 6.1 percent higher than the 210-pence price set before trading began. The pre-trading price valued the company at about 997 million pounds ($1.7 billion), SSP said today in a statement. The shares were originally offered in a range of 200 pence to 240 pence, according to people familiar with the matter.
“We are very pleased with the level of support that we have received from a broad range of investors,” Chief Executive Officer Kate Swann said in the statement. “It is a strong endorsement of SSP’s strategy, and of the potential for future growth that we see for our business.”
The company runs outlets in travel locations across the U.K., North America and Asia. Led by Swann, who joined last year after a decade at the helm of newspaper and book chain WH Smith Plc, the company joins the likes of online takeaway service Just Eat Plc and discount retailer Poundland Group Plc in testing investor demand as economic conditions improve.
Companies raised more capital globally in the last three months than in any quarter since 2006, leading to IPO fatigue that has caused more sales to be priced toward the lower end of their valuation ranges. Some companies, including U.K. clothing retailer Fat Face Group Ltd., have canceled sales.
SSP will get about 467 million pounds of gross proceeds from the listing, it said. The company said June 17 it was seeking to raise about 500 million pounds to help repay debt.
The IPO also provides owner EQT Partners AB and senior managers a chance to realize part of their investment. Stockholm-based EQT bought SSP from Compass Group Plc in 2006, backed by more than 1 billion pounds of leveraged loans.
Current and former SSP managers and employees will own 3.7 percent of SSP shares and EQT will hold 37.5 percent upon completion, assuming the full exercise of an over-allotment option, the company said.