Sir Philip Green Not Amused As MySale Raises $64 Million In London IPO & Shares Fall 20% In Price Reporting Glitch

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UK retailing tycoon Sir Philip Green took a 25% interest in the Australian online, discount fashion, flash sales site MySale a month ago, through his wife, Tina Green’s, offshore investment firm Shelton Capital Limited. 

Not long afterwards, at the end of May, the company accelerated its previously publicised plans for a London listing, with an IPO on the junior AIM section of the London Stock Exchange.

Today MySale has just priced and sold an issue of 16.67 million new shares from treasury at US$3.84 per share, raising about US$64 million (GBP £40 million) of new money for the company, gross before deducting costs and expenses of the issue. 

To complete its flotation, the shares of MySale were accepted for listing by the AIM section of the London Exchange.  After the offering MySale possessed an opening market capitalisation of about US$578 million, with just over 150.6 million total shares outstanding.

Unfortunately, there was some immediate confusion at the commencement of trading as at first, in British currency units, the shares were reported as opening at GBP £2.26 per share even though investors were probably expecting to see pricing in British pennies, or pence – i.e. 226p – as many other shares are indeed reported on the UK Exchange.

By the close of trading Monday therefore, again in British currency units, the shares had fallen almost 20% to just GBP £1.82. We are told, as an excuse, the fall in the price during the day’s trading was because of the major mix up in the way the pricing was initially reported, and indeed this could well be valid.

This subsequently led to the very prosaic announcement from MySale on the London Stock Exchange web site as follows:

MySale Group plc’s (AIM: MYSL) trading currency is currently in GBP, as opposed to British pence as intended. The quote will be changed to British pence tomorrowTuesday 17 June 8am.

For clarification, the Placing Price was 226 pence versus the quoted GBP price today of £2.26.

Of course we will only find out on Tuesday if the shares will bounce back unscathed, or whether the issue was just mis-priced in the first place. While the former excuse is much less serious, if it is indeed the cause then the company’s lead Underwriter for the offering, Macquarie Capital, will nevertheless have some serious egg on its face.

Sir Philip Green, one may imagine, will not be amused. Counting the new shares issued under the IPO his holding will have been diluted down to about 22%, unless he also participated in the issue.

Sir Philip also has merchandising contracts with MySale to supply the company with excess inventory from his Arcadia retailing group. The idea is that unsold ladies fashion inventory from his store chains, BHS, Miss Selfridge and Wallis that has become out of season, can then be distributed down-under in Australia where, at a stroke of geography and the rotation of the heavenly bodies, it will be in-season again. It is said these arrangements do not cover menswear chain Topshop, which is anyway much less seasonal to begin with.

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