Mad Butcher chief executive Michael Morton says investors' strong appetite for the company's back-door listing has not surprised him.
NZX-listed Veritas Investments has registered a prospectus for a $25 million share offer to partly fund its $40 million acquisition of the retailer.
The company said it had already allocated the $22 million of shares available to institutions and clients of broking firms, at $1.30 a share.
"Once we'd done a round of the institutions you could tell straight away that they liked the simplicity and growth potential of the business," said Morton, who bought the Mad Butcher off founder Sir Peter Leitch in 2007. "It's an incredibly well-known brand in New Zealand."
The $22 million included $10.4 million in equity commitments put in place when the Mad Butcher acquisition was announced before Christmas and excluding those, the combined broker firm and institutional offer was oversubscribed by 225 per cent, Veritas said.
The remaining $3 million of shares has been reserved for New Zealand resident shareholders who have been on Veritas' share register since February 22, and for franchisees.
Veritas will pay for the acquisition with $20 million in cash as well as an allocation of $20 million in shares to Morton, at $1.30 a piece, who will be the firm's largest shareholder.
The Mad Butcher is gradually transforming its store network to a new format, including a new logo, which Morton said had boosted sales.
He said the business was also phasing out Warriors paraphernalia - a legacy of league-mad Leitch.
"We're very much middle New Zealand now," Morton said. "Some of the higher volume stores are in high net worth areas."
Leitch remains the Mad Butcher's brand ambassador.
Morton said new stores would soon open in Invercargill, New Plymouth, Paraparaumu and Nelson. There was scope to open 34 additional stores over the next five years, Morton said.
He said three-quarters of the firm's franchisees had expressed an interest in buying shares.
The offer and acquisition are subject to approval by Veritas shareholders, which will be sought at a special meeting on April 29.
Veritas' shares closed at $1.80 yesterday.
*36 stores currently open.
*Store network generated $150 million in sales in the year to March 2012.
*Independently valued by Grant Samuel at $42 million to $48 million.