LONDON: British online domestic appliances retailer AO plans to list its shares on the London Stock Exchange in March, joining a rush of retail flotations and providing a big payday for Chief Executive John Roberts who founded the business in 2000.
The company will offer new shares to raise gross proceeds of about £60m ($98m) and offer existing shares to be sold by the current owners.
Selling shareholders will include some of the firm’s directors, including Roberts — the largest shareholder with a stake of about 40 percent — as well as senior management and private investors.
Roberts, 40, said he would dispose of a minority of his holding. “This is not about a John Roberts exit, I will be the biggest shareholder on the other side of the IPO,” he said.
AO expects at least a quarter of its share capital to be floated in the sale.
Roberts declined to say what valuation AO was shooting for. The Financial Times reported last month that AO was aiming for a valuation of £1-1.2bn. The top end of that range would put it on a multiple of about three times annual sales.
Independent retail analyst Nick Bubb pointed out Dixons Retail, Britain’s No. 1 electricals retailer which sells appliances through its Currys chain and online and is more than 10 times the size of AO in terms of total sales, has a market capitalisation of £1.6bn.
AO plans to expand its product range, including a move into televisions, and will evaluate expansion in Europe, initially in Germany.
It said it was well placed to benefit from further growth in the UK online market for domestic appliances, which market researcher OC&C forecasts will grow at a compound annual rate of 11 percent from 2013 to 2016.
The listing of AO is one of many expected in Britain’s retail sector in 2014. Russian hypermarket chain Lenta and newsagent and convenience store McColl’s have both announced intentions to float in recent weeks.
Poundland, Pets at Home, Fat Face and House of Fraser are also expected to come to market later this year, seeking to capitalise from the UK’s gradually improving economy.
Reuters
