Loss-making German budget carrier Air Berlin fell sharply in grey market trading today after it postponed its initial public offering (IPO) amid wide expectations it will cut its price range.
By 8am brokers Lang & Schwarz and DKM quoted the stock in a bid-ask range of €13.50-€14, well below the bookbuilding range of €15-€17.50.
The airline, which competes with Ryanair and Easyjet, said last night it would probably extend the offer period until May 10th, with a debut on the Frankfurt market now planned for May 11th.
The IPO had been scheduled for today.
Air Berlin gave no reason for the delay and made no comment on the IPO price range, but it was expected to issue a statement in the afternoon. A source close to the deal has said the firm was likely to lower its price range.
People close to the deal said Air Berlin's management was currently reviewing it with IPO managers Commerzbank and Morgan Stanley as well as existing shareholders.
The firm had offered almost 50 million shares in an IPO that could fetch up to around €870 million.
Some analysts have said risks linked to the fierce battle among budget carriers had not been fully reflected in the IPO range. The company wants to use the proceeds of the IPO to expand its European network and fleet