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Discount retailer B&M set for stock market flotation

February 3, 2014

Rupert Neate

B&M, a discount retailer set up in Blackpool with just pounds 750 in 1978, is preparing for a stock market flotation that could value it at pounds 2bn. The flotation, which will bring former Tesco chief executive Sir Terry Leahy back into the public eye, is one of 15 high street names, worth more than pounds 6bn, expected to float this year. Appliances Online, McColl's, Pets at Home and are thought to be at the head of a pack including Poundland, House of Fraser , DFS and Card Factory . A number of banks may also list on the market this year, including the Co-operative Bank and TSB, which is being spun out of Lloyds Banking Group . B&M was founded by Malcolm Billington and the initials originally stood for Billington & Mayman and later for Bargain Madness. Leahy is B&M's chairman and is a senior adviser to Clayton, Dubilier & Rice (CDR), the aggressive US private equity firm that owns 60% of the chain. CDR has reportedly hired investment bank Lazard to prepare its share offering, which is set to be one of the biggest stock market debuts this year. CDR is expected to interview more bankers this week to help it with the float, according to the Sunday Times. If it goes ahead successfully, CDR will make hundreds of millions of pounds of profit from the flotation. It is thought to have paid pounds 900m for its 60% stake in December 2012 . The Arora brothers, who bought B&M in 2005 from UBS Capital , which acquired it in 1999, will also collect another windfall. The brothers - Simon (B&M's chief executive), Bobby and Robin - are worth pounds 1.1bn and are the sixth richest people in the north-west, according to the Sunday Times Rich List. They have expanded the chain from 21 stores to 370, with 15,000 staff. The chain made an pounds 84m profit on sales of pounds 935m in 2012. CDR and B&M did not respond to requests for comment.

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Source: Guardian (UK)

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