FLOTATION: Shares in the drinks and snacks company, C&C, will begin to trade on the Dublin and London Stock Exchanges from July 15th at a price of between €2.60 and €3.60, some 30 per cent below expectations.
C&C hopes to raise €267 million after costs and payment to existing shareholders, giving the group a stock market value of around €1.1 billion.
It had hoped to achieve a higher valuation, of up to €1.4 billion, but was forced to reduce the price at which the shares will initially trade to reflect weak and uncertain stock market conditions.
"It reflects the price required for a successful flotation. The markets are not particularly kind at the moment and we have had to price accordingly," C&C chairman, Mr Tony O'Brien, said yesterday.
The flotation is the first since Eircom in 1999 with the company indicating a good level of interest from investors in recent weeks.
C&C owns some of Ireland's leading brands including Bulmers Cider, Ballygowan, Club Orange and Tayto.
C&C has been meeting large investment institutions in the UK and Ireland in the past couple of weeks to promote the flotation. "The feedback has been very positive from domestic and international investors. We are also hearing that the retail share offer is a great talking point here while trade customers, particularly publicans, have given an enthusiastic response so far," Mr O'Brien said.
The institutions would have influenced the cheaper pricing of the shares with market sources indicating they want the share price to be somewhere below €3 to ensure they will get an attractive return on their investment.
The actual flotation price will be announced on July 10th and will be based on stock market conditions at this time.
The company will offer 161.2 million shares for sale to investors worth €500 million. Of this, some €203 million will be shared between BC Partners, the venture capital firm that currently owns 90 per cent of C&C, and Mr O'Brien and other senior management who own the remaining 10 per cent. They will together retain 51.4 per cent of the shares after flotation.
A further €30 million of the proceeds will be paid to advisers retained by C&C to support the flotation, bringing net proceeds to the company of €267 million. It intends to use these funds to reduce C&C's debt burden.
The shares are being offered to institutional and small private investors, C&C employees and its trade customers who must subscribe for them by July 8th. The group has promised a "progressive" dividend policy, with the first interim dividend to be paid in May 2003.
C&C hopes that large investment institutions in Ireland and Britain will take up the bulk of the shares. Ordinary investors and trade customers can subscribe for a minimum of €3,000 worth of shares. Applications for more than this amount must be in multiples of €1,000, and where investors want to buy more than €10,000, they must subscribe for multiples of €5,000.
Applications from trade customers will be satisfied up to a maximum of €250,000, according to the prospectus.
No maximum limit has been set for small investors and no figure has been confirmed about the amount of shares to be allotted to this group. The company said yesterday this would depend on the level of demand but sources suggested it could be around 20 per cent.
Some €20 million worth of C&C shares will be gifted to its 2,124 employees and they can also subscribe to buy additional shares. The minimum amount they can purchase is €500. The shares are being offered through Davy Stockbrokers and Bank of Ireland.
