Ottaker float to net pounds 6m paper profit for founder

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The Independent Online
OTTAKAR's, the chain of 47 bookstores, is planning a stock market flotation next month that will value the group at around pounds 30m. The company is raising pounds 20m via an institutional placing and plans to invest the funds in new stores openings.

The float will mean a paper profit of pounds 6m for founder James Heneage, who started Ottakar's with a single store in Brighton 10 years ago. He owns 20 per cent of the company.

However, analysts speculated that Ottakar's might be snapped up by a trade buyer before it comes to market. Books etc was acquired by Borders, the US bookstore, for pounds 40m last September just ahead of its stock market debut. Other US booksellers, including Barnes & Noble, are still interested in entering the UK market and Ottakar's would make an easily digestible bite for a larger group.

However, Mr Heneage, Ottakar's founder said: "We have had no approaches in the last six months."

Ottakar's has grown quickly by concentrating on smaller towns rather than battling against Dillons and Waterstone's in the big cities. The company has identified 120 further locations where it believes its stores could be opened. It plans 15 new stores a year over the next two years.

Ottakar's recorded pre-tax profits of pounds 1.2m on turnover of pounds 23.7m last year. It is floating to enable its venture capital backers to realise part of their investment. Foreign & Colonial controls 70 per cent of the company.