(Adds Poundland comparison, Lazard on deal)
By Freya Berry
LONDON, May 22 (Reuters) - British discount retailer B&M is to list shares on the stock market, the biggest of four companies to announce plans for London initial public offerings (IPOs) on Thursday.
Several people familiar with the matter said that the listing could value the company at anything from 2.5 billion pounds ($4.2 billion) to in excess of 3 billion pounds.
London has seen a massive surge in activity in recent months, with 30 companies raising $7.4 billion in the year so far, up 163 percent on last year, according to Thomson Reuters data last week.
Hungarian airline Wizz Air, property website Zoopla and UK asset advisor River and Mercantile also unveiled plans on Thursday for London IPOs.
B&M, which sells everything from trampolines to barbecues, said it would raise gross proceeds of 75 million pounds ($126.6 million).
“The reception we’re getting is extremely encouraging. We believe investors are attracted to the scarcity value (of discount retailers),” said Chief Executive Simon Arora, one of the two brothers who acquired the chain in 2004.
“To put it bluntly, you can’t buy shares in Aldi or Lidl.”
Arora said that the company was targeting 850 stores across the UK, from 373 at the end of its last financial year, and would open around 40 stores annually.
B&M has been owned by US private equity fund Clayton Dubilier & Rice since 2012 and had adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of 130 million pounds in the year to the end of March.
The plans for listing come two months after UK discount chain Poundland floated in London.
Poundland has over 500 UK and Ireland stores. It is currently trading at almost 26 times EBITDA, although its shares have slid since their strong first-day opening performance.
A valuation of 3 billion pounds would give B&M a multiple of 23 times EBITDA.
B&M’s board is chaired by former Tesco chief Terry Leahy. The company has appointed a raft of executives including Thomas Hubner, former CEO of Metro AG’s Cash and Carry business.
This year the company acquired a German subsidiary, JA Woll, which Arora said would continue to grow at its current pace of around two stores a year.
B&M’s listing is being run by Goldman Sachs and Bank of America Merrill Lynch. Credit Suisse and Deutsche Bank are acting as joint bookrunners. Lazard is advising.
$1 = 0.5925 British Pounds Editing by Clare Hutchison and Pravin Char