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11 October 2015 |
Poundland sold its shares at 300 pence a share on 13 March 2014. This put the value of the company at £750 million. Poundland shares rallied to trade as high as 358p on its first day as a public company. This was a 19% increase in the share price of the company.
Poundland intended to use the bulk of the proceeds of the IPO to expand in the UK by opening new stores. The private equity owner of Poundland, Warburg Pincus deliberately decided to use minimal levels of debt finance in order to ensure that the company would not face onerous interest repayments. This in turn meant that the profits of Poundland could be used to expand as well as reward shareholders, as opposed to being used to pay off company debt.
Poundland restricted its initial public offering (IPO) to City institutions, which were extremely interested in the offering.
Credit Suisse, J.P. Morgan Cazenove, Canaccord Genuity, Shore Capital and Rotschild provided financial advice in relation to the IPO.
Freshfields Bruckhaus Deringer and Allen & Overy provided legal advice in relation to the IPO.