Cheeky monkeys

11 April 2006

Having stripped out value through asset sales and dividend recaps, the department store s private equity owners are seeking a quick flip. Investors may be tempted to subscribe in a buoyant market, but they should demand a fat discount. The owners can afford it.

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Debenhams has begun premarketing for a float on the London Stock Exchange, according to a person familiar with the company. Citigroup, Merrill Lynch, Credit Suisse and Morgan Stanley are reportedly working on the IPO.

The UK department store chain was taken private by private equity firms Texas Pacific Group, CVC and Merrill Lynch at the end of 2003 for £1.9bn, including deal fees. Since then the owners have extracted around £1.3bn in dividends.

Last year Debenhams launched a new store format, Desire by Debenhams, focused on womenswear. The group plans to roll out up to 130 of the new stores, as well as potentially growing its fullsize department store numbers from 119 to 240.

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