Debenhams IPOs at lower end of price range

The UK department store, backed by CVC Capital Partners, Texas Pacific Group and Merrill Lynch Private Equity, has set a price range of 195 pence per share for its IPO, giving it a market cap of £1.675bn.

Private equity-backed UK department store Debenhams has priced its initial public offering at the bottom end of its indicative range of 195 pence to 250 pence, which was set last month.
 
Debenhams announced today that the offer price of its IPO has been set at 195 pence per ordinary share, providing a market capitalisation of £1.675 billion ($2.1 billion). Including net debt of £1.2 billion, Debenhams has an enterprise value of £2.875 billion.
 
If the placing for Debenhams had been priced at the top of its indicative price range of 250 pence, the business would have had a market capitalisation of £1.95 billion.
 
At 11.30 am GMT today, Debenhams share price had climbed from 195 pence per share to 205.5 pence.
 
The offer comprises 128,205,129 existing shares and 358,974,359 new shares, representing 56.7 percent of the company’s ordinary share capital and an offer size of £950 million.
 
CVC Capital Partners, Texas Pacific Group and Merrill Lynch Private Equity invested £600 million in the May 2004 take-private of Debenhams. Since then, the firms are understood to have recouped around £1.3 billion in two recapitalisations.
 
The private equity firms are to sell up to £300 million worth of shares in Debenhams and have committed not to sell any of their remaining holdings for at least 180 days.
 
Debenhams is the second largest department store chain in the UK, with approximately 18.6 percent of total UK department store sales, according to the business.