News Column

Pets at Home is latest to list

February 20, 2014

By Hugo Duncan, Daily Mail, London



Feb. 20--Pets at Home yesterday became the latest business to outline plans to join the London stock market as float fever gripped the City.

The private equity-owned company looks set to be valued at up to pounds sterling 1.5bn in a move that will see staff share a pounds sterling 120m windfall.

Chief executive Nick Wood expects customers and staff around the country to buy shares in the firm when it joins the wave of listings slated for this year.

'At heart we are all pet lovers,' he said. 'The opportunity to be owners as well as customers is no bad thing. Our performance is very strong and the markets are in good shape. We think we can benefit from wider ownership.'

Budget retailer Poundland, online appliance group AO.com and newsagent McColl's have already announced plans to join the stock market this year. They are expected to be followed by department store chain House of Fraser, over-50s group Saga, property website Zoopla and fashion chains Fat Face and Boohoo.com.

The Government is also expected to offload the remainder of its holding in Lloyds Banking Group later this year, following the successful albeit controversial sale of Royal Mail shares last year.

King Digital Entertainment, the computer games developer behind Candy Crush Saga, this week filed to float on the New York Stock Exchange.

'There have been lots of businesses just waiting for the market and pricing to improve and that's happening,' said David Vaughan, head of initial public offerings at EY.

The decision to list Pets at Home comes 23 years after founder Anthony Preston opened the first store in Chester. The business was bought by private equity group Bridgepoint for pounds sterling 230m in 2004 and then KKR for pounds sterling 955m in 2010.

It now has 369 stores across the UK as well as 246 veterinary surgeries and 116 grooming salons for pets.

Pets at Home hopes to raise pounds sterling 275m from the offering which will see at least 25pc of the company listed on the stock market. Some 500 members of management and staff, who already own 10pc of the company, are expected to share pounds sterling 120m.

The firm's 6,000 employees will be guaranteed shares in tranches of pounds sterling 250, pounds sterling 500 or pounds sterling 750 if they apply, while retail investors will be able to subscribe for stock worth a minimum of pounds sterling 1,000.

Wood, the former boss of American Golf whose twin daughters own twin Bichon Frise dogs, said: 'Pets at Home comes to the market with a clear leadership position in the UK pet care market and with a mission to be the best pet shop in the world.

'I am confident and hugely enthusiastic about our future as we embark on the next stage of our growth as a public company.'

The company said like-for-like revenues had grown 2.4pc and underlying earnings by 11.1pc to pounds sterling 87m in the 40 weeks to January 2.

It plans to increase its number of stores to 500, veterinary practices to 700 and grooming salons to 300 in the coming years.

Halfords chairman Dennis Millard will join the board as deputy to Pets at Home chairman Tony DeNunzio.

The company said it was planning 'a progressive dividend policy' but analysts questioned whether years of private equity ownership had taken their toll on the business.

Retail analyst Nick Bubb said: 'Pets is a great business, but it will be seen as an important test of investor appetite for private equity owned retailers, as it has been through a couple of owners in recent years, so the question is how much has been left in the tank by KKR.'

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Source: Daily Mail (London, England)


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