Staff and partners at private equity firm Bridgepoint are sitting on a windfall of £2.5billion following its blockbuster debut on the stock market.
As the owner of Burger King UK and arts and crafts retail chain Hobbycraft floated in London, 166 of its 310 employees sold shares worth £308million.
Those same staff still hold a 56 per cent stake worth £2.1billion, after Bridgepoint’s shares soared by 29 per cent in their first day of trading from 350p to 452p.
The initial public offering (IPO) gave a rare insight into the wealth circulating through private equity firms, which buy and sell other businesses to make a profit and are generally infamous for their secrecy.
The firms do not often list on the public market – in the UK, Bridgepoint’s only other sizeable listed peers are 3i and Intermediate Capital Group.
Bridgepoint, most famous for its past ownership of cafe chain Pret a Manger, declined to reveal the identities of most of the 166 staff selling shares.
But three top partners have raked in £28million between them after flogging chunks of their stakes.
Executive chairman William Jackson bagged £7.8million, chief financial officer Adam Jones scooped £4.1million, and Bridgepoint’s France and Southern Europe boss Frederic Pescatori cashed in £16.5million as the stock began trading.
£1.75m for Archie Norman
The chairman of Marks & Spencer has been handed £1.75million to join the board of buyout group Bridgepoint.
Archie Norman, the former Tory MP who was also boss of Asda during the 1990s, used some of his signing-on fee to buy 275,000 shares in the firm for £962,500.
And in addition to the highly unusual payout, the 67-year-old will also receive an annual fee of £200,000 for serving as a non-executive director.
Yesterday Norman’s stock had already risen in value to £1.2million following Bridgepoint’s stock market debut.
Other non-executive directors to receive the fees include ITV boss Dame Carolyn McCall, 59, who was handed £500,000.
She bought 75,714 for £265,000 –now worth £336,170.
Part of the proceeds will be used to gift shares in the company to long-standing workers, including postmen and cleaners. The trio are even wealthier on paper.
Jackson’s remaining 1.1 per cent stake is now worth £41.8million, Jones’s 0.6 per cent stake is worth £22.8million, and Pescatori’s 2.3 per cent stake is worth £83.6million.
The stock market float comes amid growing scrutiny of the private equity industry, which has long been criticised for making drastic cuts at the companies they buy and loading them with debt in order to increase their profits when they eventually sell the businesses.
That focus has intensified in recent months amid accusations of ‘pandemic plundering’, as private equity firms have begun to snap up British companies on the cheap at a record rate.
But Bridgepoint – which started life as the private equity arm of Natwest – has insisted its move to list on the stock market will bring transparency to the murky world of private equity, and sources close to the company said it heralded ‘a new period of openness’.
An enthusiastic first day of trading yesterday added £840million onto the company’s value, taking it to £3.6billion.