Waterstones books Rothschild as IPO plans ramp up
The owner of Waterstones is preparing to appoint Rothschild to advise its multibillion-pound flotation later this year, offering the clearest sign yet that London could turn the page on a dire run of form if it edges out New York for the listing.
Elliott Management, which owns Waterstones and its US sister Barnes & Noble, is close to hiring bankers to mount its market debut as soon as the second quarter of the year, Sky News has reported.
A Waterstones float in London would be one of the most high-profile listings in years, after the capital suffered a prolonged drought in billion-pound IPOs.
Waterstones trades from 316 stores and employs about 4,000 people in the UK, while Barnes & Noble operates from more than 600 locations in the US.
The bookseller made £528m in sales in the 2023-24 financial year, marking an 17 per cent increase on the previous year, according to its most recent accounts.
Waterstones turned a profit of £46m in 2023-24, up more than 50 per cent from £29m in the year prior.
The UK bookseller has expanded aggressively under the leadership of James Daunt, who separately owns his eponymous bookseller chain, opening dozens of new shops since he took charge in 2011.
Elliott acquired Waterstones in 2018 before snapping up Barnes & Noble in 2019 for $683m, putting Daunt in charge of both sides of the Atlantic.
Under Daunt’s leadership, Elliott Management acquired other key British booksellers including Foyles, Hatchards and Blackwell’s.
Daunt attended a roundtable with Chancellor Rachel Reeves in October where she made a case for the London Stock Exchange as a major listing venue, Sky has reported.
A lifeline for the City
Waterstones’ float in London would be a major boost for the UK market, which has been hollowed out by takeovers, delistings and a steady migration of growth companies across the Atlantic.
The City’s recent run of bad form included the ill-fated Deliveroo float which ended in a $2.9bn sale to DoorDash and buyout of Darktrace by private firm Thoma Bravo just three years after listing.
Daunt had previously implied that the City could be a natural home for businesses like Waterstones, when he described the bookseller as “a solid, predictable retailer with steady growth and dividend payouts”, likening it to Next – one of London’s retail success stories.
Speaking to the BBC earlier this month, Daunt said an IPO float either in London or New York was an “inevitability and better than being flipped to the next private equity person”.
The Financial Times has previously reported that Elliott Management would appoint investment banks early this year, and it is expected the firm will line up several other banks alongside Rothschild.