B&M shares rose 5% in early conditional trading

Discount retailer B&M Bargains will be worth £2.7bn when it floats on the London Stock Exchange next week after pricing its IPO at the upper end of guidance at 270p per share.

Conditional trading in B&M began this morning, with the shares rising 5% to 284p. Early trading nudged the company’s valuation closer towards the £3bn mark, which would propel it into the FTSE 100.

B&M, which is chaired by former Tesco boss Sir Terry Leahy, had set a price range of between 230-290p after announcing its intention to float. Earlier this week it tightened guidance to between 260-280p on the back of strong demand from institutional investors.

Simon Arora, chief executive of B&M, commented this morning: “We are delighted that investors have demonstrated their support for B&M and its growth story in the value sector and that they share our excitement about the group’s future.

“We believe that becoming a public company gives us the right long-term ownership model, allowing us to build on our strong track record as we move to the next stage of development. We look forward to continuing to offer incredible value to our loyal customers, to bring the B&M experience to more people as we roll out stores and to breathe life into high streets and retail parks across Britain, creating thousands of jobs each year.”

Owners the Arora family and US private equity firm Clayton Dubilier & Rice will make £1bn from the float, while £75m of new money will be raised by the company.

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