The Hut Group seeks as much as US$2.4b in London IPO

[LONDON] British e-commerce operator The Hut Group said its initial public offering could raise as much as US$2.4 billion, which would make it Europe's second-largest listing of the year.

Besides the 920 million pounds (S$1.61 billion) of new stock that the company already announced it will sell, investors are offering another 950 million pounds of existing shares, The Hut Group said in a statement Thursday. In all, about 374 million shares, or 35 per cent of the company, are being marketed in the IPO at 5 pounds each.

Shares flew off the shelves, attracting orders to cover the IPO within 40 minutes, according to terms seen by Bloomberg, showing strong demand even in volatile equity markets. Chief executive officer Matthew Moulding will have a 25.1 per cent stake in the company after the IPO, which values the company at 5.4 billion pounds, making him a billionaire.

The deal is structured as a fixed-price listing, which is unusual in the UK. Typically, IPOs are marketed with an initial price range for as long as two weeks, with bookrunners pricing the shares based on investor orders.

A total of 615 million pounds worth of IPO shares has already been reserved for a group of cornerstone investors, with Dragoneer Investment Group's 50 million-pound commitment joining those made by BlackRock, Henderson Global Investors, Merian Global Investors and Qatar Investment Authority.

If all the shares on offer are sold, the listing would be the second largest in Europe this year after coffee giant JDE Peet's BV's US$2.7 billion Amsterdam IPO in May. The Hut Group's offering doesn't include an option for the underwriters to sell more shares if demand is high. The stock are expected to start trading on Sept 16.

BLOOMBERG