Stock Spirits trades down on London debut – Reuters

Reuters – Drinks maker Stock Spirits traded lower on its London stock market debut on Tuesday, after pricing its shares at the mid-point of its target range in a sale which valued the company at 470 million pounds ($760 million).

The British based-firm, the biggest vodka producer in Poland and the Czech Republic, said majority-owner Oaktree Capital Management and company management had raised 206.5 million pounds from the offering.

The company also raised 52 million pounds from the sale of new shares to pay down debt.

Stock Spirits priced the sale of a 55 percent stake at 235 pence per share, the middle of its original 210p to 260p range.

The shares opened at the offer price, before hitting a high of 240 pence.

By 0710 GMT, they were down 4.3 percent at 225 pence.

The offer price values Stock Spirits at a multiple of around 6.9 times 2012 core earnings, a significant discount to larger international groups such as Diageo and Pernod which have trailing price to earnings multiples of 18.5 and 18.3 times respectively, according to Thomson Reuters data.

Stock Spirits, whose drinks range from high-end Polish vodka Czysta de Luxe to fruit-flavoured liqueurs and Spanish brandies, was established in 2007 when Oaktree merged Czech businessStock with its Polish counterpart Polmos Lublin, which the private equity group had acquired a year earlier.

Oaktree looked at selling the company in 2011, pursuing a possible deal with the world’s biggest spirits group Diageo and then later considering a listing on the Warsaw bourse before eventually deciding to keep hold of it.

Following the listing, Oaktree will hold a 38.3 percent stake, although this could fall further if an over-allotment option is exercised, allowing the offer size to be increased by 15 percent if there is strong demand.

JP Morgan and Nomura acted as global co-ordinators on the sale, and were also joint bookrunners along with Jefferies.