In brief top news

Last week saw the return of the only Czech company ever to have carried out an IPO on the Prague stock exchange, when Warburg Pincus and management sold a further stake in pharmaceutical firm Zentiva through an accelerated bookbuild. The deal was launched in the form of 2m secondary shares at around Kc800–Kc825, before being increased to 3m shares at the less aggressive end of the range. Total proceeds were Kc2.4bn (US$104m). Warburg Pincus sold 2.35m shares, while management sold 648,000. There was no greenshoe. The stock’s performance since IPO has been extraordinary. Last week’s deal priced 65% above the IPO price of Kc485.The deal reduces the Warburg Pincus holding from 53.9% to 47.7%.

  • UK-listed exercise clubs group LA Fitness has recommended a 220p per share management buyout, which is backed by MidOcean Partners, the private equity firm spun out of Deutsche Bank. The deal values LA Fitness at £140m (US$263.7m) including £50m of debt and would take the UK’s last remaining listed health club operator private. The acquisition vehicle, MOP, was formed by LA Fitness’s chief executive and founder Fred Turok, who owns 15.7% of LA Fitness shares, and finance head Richard Taylor. Close Brothers Corporate Finance has been running a sales auction of the group since December, when the company admitted it had received a number of offers. Electra Partners Europe had been a frontrunner for the firm earlier in the year, but pulled out as the price rose and the profit outlook weakened.
  • The £1bn auction of the UK’s fifth-biggest supermarket group moved up a gear this week, as two rivals bidding for Somerfield lodged new indicative bids. London & Regional, a property group owned by Ian and Richard Livingstone and backed by Japan’s Nomura, has raised its offer to match that of Robert Tchenguiz, the property tycoon, and Baugur, the Icelandic retail investor. The Baugur-Tchenguiz consortium, which is backed by Barclays Capital and Apax, wrote to Somerfield yesterday confirming its 205p a share offer, valuing the supermarket chain at £1.12bn. The Livingstone team originally indicated it could offer 190p a share. Firm offers are expected in the next eight weeks.
  • UK retailer Mosaic Fashions has begun bookbuilding for its IPO on the Iceland Stock Exchange. The listing location is a consequence of the company’s ownership by Icelandic private equity firm Baugur Group. The IKr4.87bn issue will be sold to domestic investors by Kaupthing Bank. The offer will be completed in two stages, with an institutional placement followed by a public offer. Roadshows for the institutional offer began last week in Iceland and will continue with visits to the UK this week. Bookbuilding continues for a further week after roadshows, prior to the start of the public offer.