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Kathmandu shares price at bottom of the range

Kathmandu shares price at bottom of the range, Goldman and Quadrant exit

By Paul McBeth

Nov. 12 (BusinessWire) Kathmandu Holdings Ltd., the outdoor equipment chain sold by founder Jan Cameron in 2006, will join the ASX and NZX at a price of A$1.70 a share, or $2.13 in New Zealand – the bottom end of the $A1.65-A$1.90 range in the company’s prospectus.

Private investment firms Goldman Sachs JBWere and Quadrant Private Equity will sell their entire stake in the business to satisfy “excess demand from institutional and retail investors” after initially speculating they could retain a holding of between zero and 15%. They bought the company from Cameron for a reported $275 million. The sale puts the value of the company at about A$340 million.

“After the rigours of an extensive institutional roadshow, it is very satisfying to see so many of these investors on the share register,” chief executive Peter Halkett said in a statement. “We are delighted with the success of the offer which will provide us with a high quality share register.”

The private equity owners expanded the chain after they bought it from Cameron, and it now has 82 stores across New Zealand, Australia and the U.K. and plans to open another 12 stores in Australasia this year. It forecast a boost in sales to $240 million in 2010, from $216 million in 2009.

After the news broke, Cameron announced she will spend about $27 million on a new company to go head-to-head with Kathmandu with prices 50% to 60% lower than chain she founded. She plans to launch 60 stores throughout Australia and New Zealand in December next year, but is bound by a restraint-of-trade agreement until May 2011.

Trading in Kathmandu will begin at 1 p.m. New Zealand time on the two bourses.


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