Turkish discount grocer sees IPO of around $640 mln

ISTANBUL-Reuters

Turkish discount grocer Şok plans to raise at least 2.6 billion lira ($640 million) in an initial public offering (IPO) to pay down debt, one of the bookrunners said on April 9, the latest in a series of high-profile listings in Istanbul.

Şok, with more than 4,700 stores and 21,000 employees, is one of Turkey’s biggest discount retailers. Reuters reported last year that Şok was planning a 2018 flotation. Şok is one of four Turkish firms expected to list by May, sources said earlier this year.

Companies have been taking advantage of equity prices that remain near record highs in Istanbul, as well as robust international demand for Turkish listings. Despite deepening concerns about the outlook for politics, Turkey is home to Europe’s youngest population and economic growth remains strong.

Şok plans to raise at least $640 million through the listing, which will be used to repay all of its current debt, one of the bookrunners on the deal said. An over-allotment had yet to be decided, it said.

Some 35-40 percent could be listed, a source said in February. The grocer is 39 percent owned by Gözde Girişim , the investment arm of food giant Yildiz Holding, which owns Godiva chocolate and McVitie’s biscuits. It is half owned by a Netherlands-based investor consortium, while a private equity fund run by Templeton Asset Management holds 10 percent.

Separately, luxury retailer Beymen Mağazacılık said it intended to proceed with an initial public offering of up to 46 percent of its capital, including an over-allotment.

As well as Şok and Beymen, clothing retailer DeFacto and logistics company U.N. Ro-Ro are also expected to list by May.

On April 9, DeFacto said it intended to proceed with its IPO on Borsa Istanbul, with Ünlü Menkul and Citigroup Global Markets acting as joint global coordinators and joint bookrunners.

JP Morgan, Bank of America Merrill Lynch, Credit Suisse and Ünlü Menkul are joint global coordinators on the Şok listing. Bookrunners include Citigroup and Garanti Yatırım.