By Arno Schuetze
FRANKFURT, Nov 6 (Reuters) – Shares in Hapag-Lloyd hovered around their issue price in their stock market debut as investors gave the German shipping group a lukewarm reception reflecting uncertainty over the resilience of stock markets and the shipping industry.
The shares started trading at 20.05 euros ($21.81) but fell to their issue price of 20 euros apiece within minutes.
Weak demand had prompted Hapag-Lloyd to postpone the initial public offering, trim the number of shares on offer, lower the price range and then to price at the bottom of the revised 20-22 euros range.
“It was a tough fight,” Chief Executive Rolf Habben Jansen said after ringing a ship’s bell on the trading floor of the Frankfurt stock exchange to mark the company’s market debut.
The IPO values Hapag-Lloyd at about 0.5 times its book, compared to multiples of 0.8-1.2 times that peers like Maersk , Hanjin Shipping or Neptune Orient Lines trade at.
Several large investors had cancelled share orders after a profit warning from peer Maersk rocked already jittery markets.
Like its rivals Hapag-Lloyd is facing a slowdown in global trade, but it is less exposed to the Asia-Europe route than Maersk and others such as China Shipping, Cosco and Hanjin because it does more business on Europe-North America routes, which have benefited from a strong U.S. dollar.
Against a backdrop of volatile equities markets, several other German groups recently curbed their capital-raising ambitions, including plastics maker Covestro and automotive supplier Schaeffler.
Hapag attracted orders worth less than twice the amount on offer, which is usually regarded as a mininum for any IPO to be successful, a person familiar with the deal said.
“It was a restructured deal, so buyers could be sure to get shares and did not put in inflated orders,” the source said, adding that more than half of the shares were sold to Germany-based investors, significantly more than in most other IPOs.
Part-owner Klaus-Michael Kuehne and Chilean partner CSAV bought shares worth $30 million each, while shareholder TUI is offering a small amount of shares in an overallotment option.
Hapag-Lloyd reaped $300 million in proceeds from a capital increase. “That suffices to realise our plans,” Habben Jansen said. Hapag plans to buy new ships and containers.
($1 = 0.9191 euros) (Reporting by Arno Schuetze; Writing by Maria Sheahan; Editing by Christoph Steitz and Jane Merriman)
(c) Copyright Thomson Reuters 2015.
Join the gCaptain Club for curated content, insider opinions, and vibrant community discussions.
Join the 110,240 members that receive our newsletter.
Have a news tip? Let us know.
A Russian Navy frigate equipped with new generation hypersonic cruise missiles has conducted drills in the English Channel and is carrying out tasks in the Atlantic Ocean, Russian news agencies reported on Tuesday.
(Bloomberg) — Chinese lawmakers got a head start on the US election this week as they gathered to vote on the largest fiscal package since the pandemic. But now that...
by Ossian Shine, (Reuters) – Germany’s Red Bandit, skippered by Carl-Peter Forster, was crowned winner of the 45th Rolex Middle Sea Race, becoming the third German yacht to win the prestigious offshore challenge. Following...
Access exclusive insights, engage in vibrant discussions, and gain perspectives from our CEO.
Sign Up
Maritime and offshore news trusted by our 110,240 members delivered daily straight to your inbox.
Essential news coupled with the finest maritime content sourced from across the globe.
Sign Up
Join The Club
