Ardagh poised to press ahead with €5bn flotation

Paul Coulson has been eyeing IPO of glass and metal containers group since 2011

Glass and metal containers maker Ardagh Group, whose customers include Coca-Cola, Heineken and Nestlé, is advancing plans to start the process next week on its long-awaited New York Stock Exchange flotation, which may value the group at as much as €5 billion.

Ardagh, which is led by executive chairman Paul Coulson, and its financial advisers at Citigroup have been working closely with market regulators in the US Securities and Exchange Commission (SEC) on perfecting paperwork surrounding an initial public offering (IPO) since it made an initial filing 13 weeks ago, according to sources.

In a filing amendment, submitted in late December, Ardagh restated its pro forma net profit figure for the nine months through September to €119 million, almost 120 per cent higher than the figure given in November.

It is understood that this is the result of the SEC taking a view that the write-off of deferred financing costs and the premium Ardagh paid to redeem about €916 million of bonds last September should be stripped out. This would bring it into line with how the company had accounted for a buyback of €1.34 billion of debt securities in May.


Both redemptions took place against the backdrop of Ardagh taking advantage of market conditions to issue billions of euro of bonds that carry lower interest rates.

Key figure

Crucially, the amended accounting treatment that resulted in Ardagh posting a higher net profit did not affect its €1.03 billion earnings before interest, tax, depreciation and amortisation (Ebitda). That is the key figure in the company’s results for analysts and creditors.

Ardagh, which traces its roots to the formation of the Irish Glass Bottle Company, has been transformed by a series of acquisitions over almost two decades under Mr Coulson. The group is now one of the world’s largest makers of glass bottles and metal containers, with almost €8 billion of annual sales – and a similar level of debt.

The group added beverage cans to its portfolio last June through its largest-ever deal, the $3.4 billion (€3.2 billion) purchase of a beverage cans operation sold by US packaging group Ball Corp and UK peer Rexam to appease competition authorities as they merged.

Market conditions

Mr Coulson, who took Ardagh private in 2003 and owns about 36 per cent of the business, has been looking at returning it to the stock market since 2011. He signalled last September that he intended to proceed with the sale of an initial 5 per cent stake to raise about €250 million. He said the following month that he would like to “get on with” an initial public offering in March or April, subject to market conditions.

It is understood that Mr Coulson is preparing to use the publication of the group’s full year results on Thursday to announce that it will press ahead with the IPO on the New York Stock Exchange.

The share performance of some of Ardagh's closest rivals since its November SEC filing has been somewhat mixed. The world's largest glass bottle maker, Owens-Illinois, has gained 4.5 per cent in value, while metal packaging giant Ball Corporation has fallen by 4.6 per cent. The wider US materials sector, however, has risen almost 11 per cent.

Market sentiment towards Ardagh has improved strongly in recent times. The market interest rate, or yield, on $1.65 billion of bonds sold last May to part-finance the group’s purchase of the Ball-Rexam assets has fallen since then to 5.9 per cent from 7.25 per cent as the value of the notes rose.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times