Financier Paul Coulson's Ardagh Group confirmed on Wednesday it plans to launch an offer to allow investors to swap their stock for direct shares in its beverage cans unit that listed on the New York Stock Exchange four weeks ago.
Ardagh Group, a glass and metal packaging giant, floated 8 per cent of its stock in New York in March 2017, but set about securing a separate listing for its drinks cans unit, Ardagh Metal Packaging, this year to take advantage of the high valuations being put on assets in this area of the industry.
The listing was secured by way of a reverse merger early last month into a listed cash shell, or special purpose acquisition company, called Gores Holding V.
Ardagh Group said that it plans to launch the exchange offer next week to buy all of its outstanding publicly-tradable class A common shares for a portion of shares in the newly-listed Ardagh Metal Packaging unit, in which it retains an 82 per cent stake.
Ardagh Group’s direct holding will be diluted as its investors take up the exchange offer to swap each of their shares for 2.5 units of Ardagh Metal Packaging stock.
“Following the proposed exchange offer, [Ardagh Group] intends to initiate the process for delisting of the [Ardagh Group] shares from the New York Stock Exchange,” the company said, adding that the aim is to “eliminate the inefficiencies resulting” from having two publicly-traded companies with separate stock market reporting obligations.
The proposed exchange is conditional on holders of at least two-thirds of Ardagh Group’s tradeable stock deciding to take up the offer. A full take-up of the offer would see Ardagh Group’s stake in the beverage cans business drop to about 75 per cent.
Ardagh Group shares closed at $26.27 on Tuesday, while Ardagh Metal Packaging ended the session at $10.71.
At the top of the group’s corporate ladder is a holding company that owns some 92 per cent of Ardagh Group. Mr Coulson is effectively a 36 per cent shareholder in the holding company.
Other shareholders include employees and hundreds of small legacy investors resulting from then vastly smaller company’s original take-private from the Dublin stock market in 2003.