Ardagh Group investors opt to swap shares into newly listed drinks cans unit

Ardagh Group, the glass and metal packaging group led by Dubliner Paul Coulson, said on Wednesday that 85 per cent of the holders of an 8 per cent stake in the group that was tradable on the New York Stock Exchange have opted to take up an offer to swap their stock for direct shares in the group's newly listed beverage cans unit.

The company said that the results of the exchange offer are preliminary and subject to change, but that it is on track to see Ardagh Group’s stake in Ardagh Metal Packaging, which floated in early August, fall to about 75 per cent. It stands at 82 per cent currently.

Ardagh Group floated 8 per cent of its stock in New York in March 2017, but set about securing a separate listing for its 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.

Delisted

Ardagh Group offered 2.5 shares in Ardagh Metal Packaging for every one unit held in the parent group. Ardagh Group delisted from the New York Stock Exchange on Tuesday.

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Ardagh Group employs more than 16,000 people and has annual sales of approximately $7 billion (€6.1 billion). Its fast-growing Ardagh Metal Packaging unit is responsible for 5,000 of the group employees and $3.5 billion of its sales.

Ardagh, which traces its roots back to the long-shuttered Irish Glass Bottle factory in Ringsend in Dublin, entered the drink cans business in 2016 through the $3.4 billion purchase of assets from US packaging group Ball and UK rival Rexam as they offloaded plants to appease competition authorities in completing their own merger.

Ardagh Group announced last month that it planned to pay a special dividend of $1.25 per share, totalling $295 million. Some $23 million of this will go to all registered stock market investors in the 8 per cent of tradable stock as of Monday, with the remaining $272 million set to be channelled to a holding company at the top of the corporate tree, called ARD Holdings.

Legacy shareholders

ARD Holdings is expected to pay as much as half of the $272 million out to its own legacy shareholders, according to industry sources. These include small shareholders who remained on board a precursor of the packaging giant, Ardagh Glass, when it was taken private in 2003 and opted to reinvest part of the cash they received two years later as management used a special-purpose vehicle to purchase all the stock in the business.

The rest is set to be used to pay down the holding company’s debt, according to industry sources. ARD Holdings has the equivalent of $2.3 billion of borrowings.