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US private equity group reduces stake in B&M Bargains

B&M large store

American backers in Liverpool discount store chain B&M have sold part of their stake, raising £384m.

CD&R held 29.4% of shares in the Speke-based business which floated on the stock exchange last year.

The New York-based private equity group had planned to sell 100m shares, but due to demand raised the sale to 120m shares, reducing its share holding to 17.4%

B&M, which trades under the B&M Bargain and B&M Homestore brands, listed its shares on the stock market at 270 pence in June last year.

Last month the firm said it was on track to meet expectations for full-year revenue and profit.
The company was formed in 1978 by entrepreneur Malcolm Billington with just £750.

But it wasn’t until it was acquired by two brothers - Simon and Bobby Arora - that its fortunes soared.

When the Aroras took over the chain it sold mainly groceries and had just 20 stores. Now 90% of the goods it sells are non-food and it has expansion plans that could see it operate up to 600 stores.

In December, 2012, the Aroras sold a majority stake in the business to US private equity outfit, Clayton, Dubilier & Rice (CDR), for a figure believed to be in excess of £900m.

The sale was handled by Bank of America Merrill Lynch and Deutsche Bank. Lazard acted as a financial adviser to CD&R.

After the sale the private equity group will own less than 20 per cent of the equity in B&M.

Source : Neil Hodgson - Liverpool Echo

05 February 2015

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