Retailer floats, share price rise slightly in early trading and then drops from $2.28 to $2.16.Dick Smith Holdings, listed as ‘DSH’, kicked off trading at 12pm today on the ASX at a price of $2.20 per share.
DSH shares on the Australian Stock Exchange opened at $2.28, but early trading at 12.22pm showed the share price fell to $2.18 before rising to $2.32, slightly above the asking price. Volume of shares traded so far is 6,068 million.
The IPO, announced last month, looks set to raise several hundred million for Dick Smith’s owners Anchorage Capital. Based on the A$2.20 asking price, the retailer has a market capitalisation of $520 million.
Anchorage are confident of a smooth IPO today, reporting strong demand among institutional investors for the retailer’s initial public offering (IPO), as it announced 236 million ordinary shares were issued.
Investors including NAB, UBS, CitiCorp, Macquarie Equities and JP Morgan snapped up DSH shares, according to a notice to the ASX today listing the top 20 investors.
Anchorage Capital, will remain as a key shareholder retaining a 20% stake. Dick Smith management including CEO Nick Abouud will hold 11.5% of the shares issued.
Anchorage paid Woolworths just $20 million for the business last year and a further $74 m to cut Woolies out of pocketing any future sale proceeds.
In the last year, Abouud and his turnaround team have revamped Dick Smith’s store format, product range, and opened at a slew of new locations.
There is now 359 stores in ANZ – the largest network of electronics stores in the region – five new locations have been opened so far in FY14, with plans to open a further 11 this year alone.
“Today is a major step in the evolution of our company, one that has been a fixture in the retail community in Australia and New Zealand for decades,” Nick Abouud, CEO of Dick Smith, said, who will also make several million out of the float.
“We have been greatly encouraged by the institutional and retail shareholder response to the IPO and the strong demand for Shares. This has allowed us to assemble a high quality register of institutional Shareholders.
“However, we are 100% aware of the responsibility we have to deliver on behalf of our Shareholders. They want to see us meet our objectives and to deliver sustainable profit and growth.”
Dick Smith’s FY2013 sales totaled to $1.28 billion, net profit of $6.7m, but is predicting profits to lift six-fold to $40m in FY14.
Dick Smith Chairman and Anchorage founder, Phil Cave, paid tribute to the transformation program by Abouud & Co.
“Working with Nick has been a great partnership for us. A tremendous amount of work has gone into driving change and getting Dick Smith to the point that it can become a listed company,” he said.
“There is still more to do, of course. Anchorage is retaining a significant shareholding as a sign of our confidence in the company’s forecast financial performance.”
Goldman Sachs and Macquarie Capital were joint lead managers, joint bookrunners and underwriters to the Offer. Aquasia advised the Board in relation to the Offer and Minter Ellison was Dick Smith’s legal adviser.
