Pandora Jewelry’s IPO Priced; Offering At High End Could Be Worth $2.16 Billion

(Reuters) – Danish jewellery maker Pandora on Monday launched an up to $2.16 billion initial public offering of stock, consisting mainly of a big selloff by private owners and marking a further recovery of the Danish IPO market.

The offering offers a partial exit to its majority owner, private equity investment firm Axcel, and family owners.

Pandora set a preliminary 175-225 crowns per share price range, which it said valued the company’s equity at up to 29.2 billion crowns ($5.13 billion).

The company said in a statement the IPO would consist of 44.5 million existing shares and 2.7-3.4 million new shares, plus an overallotment option — also known as a greenshoe — of 6.7 million existing shares.

At the indicated price range, the IPO would be worth $1.45 billion at the low-end price without the overallotment shares and up to $2.16 billion at the top price with the greenshoe.

Sydbank analyst Soren Hansen said he thought Pandora would price at the bottom of the indicated range, based on a peer analysis and a 2010 earnings before interest, tax, depreciation and amortisation (EBITDA) forecast of 2.5 billion crowns.

“You also have to discount net debt of 2 billion. That puts the market capitalisation at 21-25 billon crowns,” Hansen said.

“That suggests… that the selling price will land at the lower end of the 175-225 crown range,” he said.

The final price will be determined through a bookbuilding process that will run from Sept. 23 to Oct. 4, Pandora said.

“The free float will be at least 35.7 percent, excluding the overallotment option,” Pandora A/S said.

Pandora shares are due to begin trading on the Copenhagen bourse on Oct. 5, it said.

PRIVATE EQUITY FIRMS’ SALES

Pandora Chief Executive Mikkel Olesen said the listing would enable Pandora to consolidate its distribution channels “and offer a platform for future growth as we aim to enhance our public profile and the visibility of the brand and product offering, especially in our new markets”.

Pandora had said on Sept. 7 that it intended to raise around 600 million crowns in a stock market listing that would also give a partial exit to its private equity and family owners. [ID:nLDE6860B3]

The offering of new shares corresponds to that amount. Pandora, which makes jewellery in Thailand and had 2009 sales of 3.46 billion crowns, was tipped as a likely candidate for an initial public offering by banking sources last month. [ID:nLDE67Q0SF] [ID:nLDE67U1AW]

Private equity investment firm Axcel holds 59.3 percent of Pandora’s shares through funds it controls, while the rest is owned by the founding family.

Goldman Sachs, JP Morgan, Morgan Stanley and Nordea will be joint global coordinators and bookrunners for the IPO, while Carnegie and SEB are co-lead managers. Rothschild and FIH Partners are financial advisors to Pandora and Prometheus Invest, a vehicle controlled by Axcel.

The news from Pandora follows a flotation in Copenhagen in June by food ingredients maker Chr. Hansen (CHRH.CO: Quote, Profile, Research, Stock Buzz), the bourse’s first major listing in years.

Denmark-based cleaning services firm ISS [ISSHG.UL] is also looking into a stock market flotation as its owners join a line of private equity firms testing markets with an eye to selling long-term investments.[ID:nLDE67O0DK]

The private equity owners of Danish telecom operator TDC (TDC.CO: Quote, Profile, Research, Stock Buzz) are widely seen as readying for a large stock offering.[ID:nLDE68G05Z] \

By Anna Ringstrom and John Acher

(Additional reporting by Peter Levring and Ole Mikkelsen; Editing by Louise Heavens, Mike Nesbit) ($1=5.688 Danish Crowns)