Poundland fell in early London trading after its biggest shareholder, Warburg Pincus, sold a £142 million stake in the UK discounter, cutting its holdings by almost half.
The stock slid as much as 6.1 per cent and was down 4.9 per cent at 396.3 pence thius morning, reducing the company's market value to £991 million.
The sale by Warburg Pincus of a 14 per cent stake reduced its holdings in the 600-store chain to 16.4 per cent. It comes less than a week after Poundland agreed to buy 99p Stores for £55 million, a deal that sent its share price soaring 15 per cent on the day it was announced.
The private-equity firm sold £35 million Poundland shares to institutional investors at 405 pence apiece in an offering organised by JPMorgan Chase and Credit Suisse Group AG, according to statements released after markets closed Tuesday.
The offering was increased from 25 million shares.
Warburg Pincus bought Poundland from Advent International in 2010 and partially exited its investment last year in an initial public offering of the UK retailer.
“Warburg Pincus remains a significant and supportive shareholder of the company, its management team and strategy,” the private-equity firm said in one of the statements.
Warburg Pincus has undertaken not to sell any more Poundland shares for 90 days after this sale.
News by Bloomberg, edit by ESM
