B&M Retail is drawing up plans for a stock market flotation valued at £1bn, according to Sky News.

Investment firm Clayton Dubilier & Rice (CD&R), which owns a 60% stake in the fast-growing discount retailer, is set to appoint investment bankers before the end of the year to kick-start plans for a flotation.

The move could see Sir Terry Leahy, the chairman of B&M, return to a London-listed business just two years after leaving his position as chief executive of Tesco.

B&M posted a 43% increase in pre-tax profits to £90.6m on sales up 31.5% to £937.2m in the year to 31 December 2012.

It has also been reported that Poundland, another discounter rumoured to be close to a flotation, interviewed eight investment banks last week as it prepares a stock market listing valued at over £700m.

“A flotation is usually a natural output of success for firms to move forward,” Poundland CEO Jim McCarthy recently told The Grocer.