May 9, 2007 / 9:49 AM / 12 years ago

Booker strikes deal to return to stock market

LONDON (Reuters) - Booker, the cash-and-carry group taken private by Icelandic investment group Baugur two years ago, said on Wednesday it would return to the stock market via a reverse takeover of minnow Blueheath Holdings.

Blueheath BLH.L will issue nearly 1.35 billion new shares to acquire Booker, with the 3 billion pounds a year turnover business to be traded on AIM as Booker Group.

Shares in Blueheath soared 108 percent to 26-1/2 pence by 10:17 a.m., which would value the combined group at just over 395 million pounds if it began trading today.

However, the opening valuation of the group will be determined by Blueheath’s opening price on June 4 — and a source familiar with the situation said internal estimates were for around 350 million pounds.

Booker’s shareholders including Baugur and Bank of Scotland HBOS.L will retain their holdings and will own 90 percent of the combined group, although Blueheath Executive Chairman Richard Rose will chair the company.

Booker Chief Executive Charles Wilson, formerly right hand man to Stuart Rose at Marks & Spencer (MKS.L) before he surprisingly quit for Booker in 2005, will continue in his current role.

The group said it had gone for a reverse takeover rather than a straight initial public offering in order to acquire Blueheath and a listing at the same time.

“We want to broaden the business ... to combine their delivery and technology with our scale, and I think Booker will do well on the public market,” Wilson told a conference call.

He added that group sales had improved from being down 5.9 percent when he joined to a rise of 0.6 percent for the six months to March 2007.

Operating profits were 39 million pounds for the year to March 2007, up 44 percent on 2005/06, and Wilson said he hoped the Blueheath deal would improve margins.

He added that further acquisitions were a possibility, and said there was one overseas market he had his eye on, but would not say what it was.

NO REGRETS ON M&S

Wilson was part of the executive team charged with revitalising Marks & Spencer after retail billionaire Philip Green narrowly failed to take over the company in 2004.

A long-standing lieutenant to then new CEO Stuart Rose, Wilson was credited with cost-cutting and an overhaul of the group’s supply chain before moving to Booker.

Wilson told the conference call he had no regrets about leaving the high street firm despite recent moves by Rose to try to identify a successor.

“Candidly, I did not see myself as CEO of M&S while it was doing well,” he said.

“I am chuffed to bits that they are doing so well. Nobody is more keen to see that than me, but I have always been attracted to Booker,” he added.

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