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Last Updated: Thursday, 20 April 2006, 06:30 GMT 07:30 UK
Debenhams unveils 2bn float plan
Debenhams store on London's Oxford Street
Debenhams is a big name on the High Street
Department store chain Debenhams has announced plans to float the company in an initial public offering that will value the firm between 1.7bn and 2bn.

Debenhams said the price range of shares would be between 195p and 250p.

The move will see the company's stock market return after two years under the ownership of venture capitalists.

The sale will be a money-spinner for private equity backers who bought the department store group in 2003 - CVC, Merrill Lynch and Texas Pacific.

They invested 600m of their own money to buy Debenhams in a deal worth 1.7bn, and will keep a 40% stake following the new floatation.

Slim pickings?

Some analysts have already questioned the float in light of the current 1.7bn debt the private equity firms have built up at Debenhams.

The prospects for Debenhams' trading for the financial year ending August 2006 remain in line with management expectations

"They've geared up the company with debt and not necessarily left much for the new shareholders," says Wake Up To Money's Mickey Clark.

"It's a tactic that investors are becoming more aware of. Companies like Britvic have come back to the market and sometimes they don't necessarily perform that well."

Debenhams said on Thursday that it expects to announce its exact share offer price on 4 May.

It added that like-for-like sales in the 26 weeks to 4 March were up 0.6%.

"The prospects for Debenhams' trading for the financial year ending August 2006 remain in line with management expectations," said the company.

Debenhams is the UK's second largest department store group, with 123 stores across the country.

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