Chr. Hansen IPO Aims for $527 Million

COPENHAGEN (Reuters) Danish food ingredients group Chr. Hansen said it aimed to raise a net 3.16 billion crowns ($527 million) in an initial public offering of new shares that marks a thaw in the Danish IPO market.

Chr. Hansen said in a statement on Wednesday it had set the price range for the offering at 87-117 crowns per share and the book building would run from May 25 to June 2 at the latest.

“We aim for a broad ownership, Danish as well as foreign (owners), institutional as well as smaller,” Chief Executive Officer Lars Frederiksen told Reuters.

The price range represents a valuation of around 16 to 20 times 2011 earnings which is in line with peers such as Danisco (DCO.CO) trading at more than 16 times earnings, a banking source close to the deal said.

The source also said demand is expected to come from funds seeking exposure to defensive sectors such as food, and bankers will visit investors in Europe and the United States with a roadshow.

Sydbank analyst Rune Dahl said the price range values Chr. Hansen at 11.6-17.1 billion crowns — above his own expectations which had been for 12-14 billion.

“We want to see a price below 100 crowns to recommend our clients to take part. The 117 crowns is definitely too expensive, whereas 87 crowns is pretty attractive,” he said.

In addition to the primary offering, current owner French private equity group PAI Partners will offer to sell up to 27.15 million of its shares, Chr. Hansen said.

Chr. Hansen, which makes cultures, dairy enzymes andnatural colours for the food, health and animal feed industries in around 140 countries, was de-listed in July 2005 when it was bought by PAI Partners for 8.2 billion crowns.

It said the free float would be 42-46 percent of the stock after the share sales, and the company aims to pay dividends equal to 30-40 percent of net earnings.

OWNER KEEPS MOST

Frederiksen said current financial market uncertainty had not affected the offering.

Sydbank’s Dahl, however, said this was probably behind PAI Partners’ decision to keep a majority stake, and the owner was likely to sell its remaining stake later on.

The firm announced its plans for the flotation on the Copenhagen bourse on April 26, saying it aimed to raise around 450 million euros ($559 million) and the cash would help it grow organically and through acquisitions.  

The company said on Wednesday it would use the proceeds to pay off debt.

Another Danish firm, ambulance and rescue services group Falck, plans to rejoin the Copehagen bourse and is expected to set out its IPO shortly.

Both deals would probably be smaller than a possible offering of shares in Danish telecom group TDC (TDC.CO) which has been expected this year.

Though TDC has remained listed in Copenhagen after a 2006 quasi-buyout by five private equity firms, the stock is illiquid so a possible stock offering is seen by many as a “reintroduction” to the bourse, in other words an IPO. ($1=5.993 Danish Crown) ($1=.8054 Euro) (Additional reporting by Chris Vellacott in London, Karin Jensen and John Acher; editing by Will Waterman and Jon Loades-Carter)