Drink and snacks group C&C said yesterday that it expected to be valued at around €800 million when its floats on May 14th. Jane O'Sullivan, Markets Correspondent reports
The company expects its shares to be priced somewhere between €2.26 and €2.74, depending on investor demand.
The expected valuation is below the €1 billion plus valuation and price range of €2.60 to €3.60 per share that the company had hoped for in its aborted 2002 flotation.
Under the terms of the offer, 176 million ordinary shares worth around €440 million will be issued to institutional investors, with an over-allotment option of up to 10 per cent.
Following the listing, the company will have a freefloat of nearly 58 per cent. Its majority shareholder, private equity group BC Partners, will realise €429 million as it reduces its stake from over 90 per cent to 37.6 per cent, although this will be subject to a lock-up arrangement of 180 days.
The 10 most senior members of the company's management are expected to share €11 million between them as they sell 30 per cent of their stake, but will retain a shareholding of around 4.7 per cent in the company.
C&C began its roadshow yesterday and set May 13th as the final date for receipt of bids from the institutional investors to whom it is selling the shares.
However, there is provision for retail investors to buy shares in the company through stockbroking intermediaries. Unlike Eircom, no minimum investment amount has been set for such investors, a company spokesman said yesterday.
The shares will begin conditional trading on May 14th.
There were mixed views yesterday on the price the shares were likely to fetch. While one analyst described a market capitalisation of around €800 million as attractive relative to C&C's peers, others thought it might be valued at less.
"I would expect it to go below the midpoint of the range. There is plenty of other value around at the moment," one fund manager said. However, he said the group was set to offer a healthy dividend of around 5 per cent.
The company's pathfinder prospectus, published yesterday, said C&C expected its first full-year dividend to be covered at least two times by earnings before amortisation of goodwill and intangible assets.
The prospectus also showed that C&C's leading brands have a significant share of their various markets. Its Bulmers brand dominates the Irish cider market with an 81 per cent share, while Ballygowan boasts a 34 per cent share of the bottled-water market.
Among the risk factors for the group, it cited its dependence on the Irish market, the seasonal fluctuations in demand for some of its products, and the recent smoking ban.
C&C also announced the appointment of five new non-executive directors to the board yesterday:Mr Liam FitzGerald, chief executive of United Drug; Mr John Hogan, the former managing partner of accountants Ernst & Young; Richard Holroyd, a non-executive director of Otto Weibel in Switzerland; IAWS chairman Mr Philip Lynch; and Ms Breege O'Donoghue, an executive director of the Penneys retail stores.
