Former Tesco chief Leahy plans £2.9bn B&M comeback


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The Independent Online

Tesco’s former chief executive Sir Terry Leahy is poised to make a successful stock market return as value retailer B&M prepares for a listing next month which could value it at as much as £2.9bn.

The shares are expected to be offered for between 230p and 290p giving the Liverpool-based company a market value of £2.3bn to £2.9bn, ahead of initial expectations of £2bn, after details of its intended price emerged on Friday.

B&M, which sells everything from bed linen to food, is pushing ahead with its plans to float despite an increasingly lacklustre response for new listings from investors as a flood of retailers come to market competing for investment.

Its non-executive chairman Sir Terry and the chief executive Simon Arora hosted analysts at B&M’s Yiewsley store in west London on Wednesday, to outline its growth plans.

These include doubling its store count to 800 in the UK and expanding across Europe to become the  continental version of the US  discounter Dollar General.

B&M plans to raise £75m from the float to reduce its debt. The US private equity firm Clayton Dubilier & Rice bought a large stake in 2012  and  plans to sell part of that.

Between 25 and 40 per cent of B&M’s shares will be freely traded after the listing and the final price is expected to be set on 11 June, the day before share dealings commence.

The flotation offers an intriguing return to City life for Sir Terry, who left Tesco on a high after a sparkling 14-year reign typified by worldwide expansion.

However, the failure of his initiatives since his departure and a scathing attack by predecessor Lord MacLaurin last year have taken the gloss off his tenure. Sir Terry’s return comes as his knighted retail contemporaries are thrust into the City spotlight.

TopShop’s owner Sir Philip Green is poised to make a return to the stock market for the first time since he was ousted from the discount retailer Amber Day in 1992. The flash sale website MySale, in which he has a 25 per cent stake he paid £50m for, is planning a £300m flotation.

The former Marks & Spencer chief Sir Stuart Rose, who chairs the quoted online grocer Ocado, had planned to float lifestyle retailer Fat Face.  But the plans were shelved due to lack of investor demand. He had stepped down from  fellow flotation candidate Blue Inc to spur the move.