Shares of Watches of Switzerland debut on LSE, surge 15%

Shares of Watches of Switzerland Group Ltd, the largest watch retailer in Britain, have surged 15% on the first day of trading on the London Stock Exchange.

The stock gained to trade at a high of 315 pence per share, having debuted on the LSE at 270 pence.

The firm’s IPO involved the sale of 34% of its shares for a target of close to 220 million pounds, which gave the company a market valuation of 647 million pounds. The Watches of Switzerland did say that it takes the route of an over-allotment option to bump up the free float to 37%.

The IPO priced the shares at the top end (270 pence) and the initial gains show that demand for the retailer is strong. The company accounted for over half of all Rolex sales in the United Kingdom in 2018.

The firm’s chief executive Brian Duffy noted prior to trading that the stock’s debut on the London Stock Exchange marked “the next phase” in the company’s growth.

He added that the reaction investors had given to its business during the initial public offering was a sign of the many opportunities that Watches of Switzerland has to continue growing.

The retailer was prior to its IPO, owned by Apollo Global Management, a private equity firm headquartered in the United States. It operates 125 shops in the U.K and has recently opened standalone stores in several states in the U.S., including the financial capital New York and in Las Vegas.

Success for the public listing of the company is likely to provide a much-needed boost to the market. For much of 2019, European dealmakers, as well as stock exchanges, have suffered from a dearth of big deals.  Proceeds in the first three months declined significantly, hitting their lowest levels in over a decade in the first three months of 2019.

Actors in the IPO were Barclays and Goldman Sachs International who acted as its global coordinators, while Investec and BNP Paribas were the bookrunners. The listing’s financial advisor was N.M. Rothschild.