Debenhams prepares for pending flotation

Debenhams is in preparatory mode for its flotation on the London Stock Exchange later this year. The department store has been valued at approximately £3 billion, including debt.

Final pricing of the company is to be set at the beginning of May, when it launches on the LSE. The flotation will mean an exit for its owners, buy-out groups Texas Pacific Group and CVC Capital, and the private equity arm of Merrill Lynch. The trio bought the store three years ago.

Debenhams realized sales of £2.09 billion last year, up 9.7 percent from the previous year. The store will float on the back of its half-year results ended February, in what promises to be the UK's biggest IPO this year.

The department store has retained Citigroup and Merrill Lynch as global coordinators for the IPO and has mandated Morgan Stanley and CSFB as bookrunners.

Part of the proceeds from the flotation is expected to be used to pay its debt, which stood at £1.9 billion at the end of August last year.

Debenham's management, led by chief executive Rob Templeman, owns up to 12 percent of the equity. TPG owns 36 percent, CVC just under 26 percent and Merrill Lynch owns 20 percent. The trio is expected to retail a small share after the float.