One51 shares likely to float at between €2.10 and €2.20

Market watchers speculated on Friday that plastic container maker One51 is likely to price its shares at somewhere between €2.10 and €2.20 should it go ahead with a stock market launch next year.

The shares, publicly traded but not listed on any stock exchange, were selling at €2.20 following One51’s announcement that it was preparing the way for a flotation. This valued the company at €345.4 million.

One51 has ended talks with private equity fund Capvest on an indicative offer of €2.50 a share. Sources think it is more likely to price the shares at less than this, but say that they will still have to be more than €2 to ensure existing shareholder support for a stock market launch.

Long-standing shareholder Dermot Desmond sold his 26 per cent to Canadian investor CDPQ in May. He is believed to have sold at a premium to the €1.85 he paid for the Furlong family’s Pageant Holdings stake in 2015, a move that made him One51’s biggest investor.

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Dual listing

One51 favours a dual listing on the Dublin and Toronto markets. Any flotation is likely to take place at some point close to the middle of 2018. Analysts believe that timing will play a part in getting the best out of going to the market.

“They should strike while the iron is hot, their story is a very attractive organic growth proposition,” says David O’Brien of stockbroking firm Goodbody. He notes that the company points out that a flotation is tied to market conditions.

Darren McKinley of Merrion Capital also suggests that a public offering should be sooner rather than later.

Under chief executive Alan Walsh, One51 has focused on making plastic containers for the food, manufacturing and healthcare industries in North America, Europe and China.

While commentators say that immediate prospects are good, the medium term is a harder call. The point out there are growing signs of volatility in the markets, and easing demand in China.

At the same time, increases in interest rates, which will push up the cost of borrowing cash, and a rise in raw material prices could also pose a threat over the longer term. Like any flotation, One51’s is unlikely to be risk-free.