Ziggo NV owners including Warburg Pincus LLC and Cinven Ltd. plan to raise as much as 744.6 million euros ($986 million) in an initial public offering that will compete to be Europe’s largest this year.
The shareholders of the Dutch cable-television company will sell 35 million shares with an option to add a further 5.25 million shares to the offer, which would together represent about 20 percent of Ziggo’s issued share capital. The stock will be priced at 16.50 euros to 18.50 euros a share, Utrecht, Netherlands-based Ziggo said in a statement today. The sale is the first initial public offering on the Amsterdam Stock Exchange in more than two years.
Ziggo is neck-and-neck with DKSH Holding Ltd., the largest privately owned company in Switzerland, to hold Europe’s biggest IPO so far this year. DKSH, which helps companies expand in Asia, said yesterday its shareholders plan to raise as much as 903 million Swiss francs ($991 million) in a stock sale.
“The launch of our IPO today is another major milestone for Ziggo, and the level of interest we have already seen in the investment community is very encouraging,” Chief Executive Officer Bernard Dijkhuizen said in the statement.
DKSH sells marketing, distribution and after-sales services. Clients have included Nestle SA, Levi Strauss & Co., and drugmaker Sanofi.
Buyout firms are reviving IPO plans following an equity rally this year after the European sovereign-debt crisis forced them to delay sales last year. Warburg and Cinven are seeking to return cash to investors.
The firms will reduce their stakes in Ziggo from 36.4 percent to 29.1 percent each if the over-allotment option is fully exercised, the prospectus shows.
“We expect our shareholders to reduce their stakes further in the future, but this will be a staged process,” said Chief Financial Officer Bert Groenewegen at a press conference today. The IPO includes a so-called lock-up agreement under which most shareholders can’t sell for 180 days after the sale and members of the current management can’t sell for a year.
The cable operator competes with Royal KPN NV (KPN) and Liberty Global Inc. (LBTYA)’s UPC on the Dutch broadband market. Liberty Global previously expressed interest in Ziggo.
Ziggo isn’t pursuing a “dual track” working both on a share offering and a takeover, Dijkhuizen told reporters. “We are not in talks with Liberty Global and we don’t expect to be acquired.”
A scenario in which Ziggo would buy the Dutch unit of Liberty in the future is something Dijkhuizen wouldn’t reject “on principal,” he said.
Ziggo expects to benefit from increasing appetite for high- definition content and broadband Internet, the company said in its prospectus. Ziggo’s earnings before interest, taxes, depreciation and amortization jumped 7.7 percent to 834.6 million euros last year. Sales climbed 7.4 percent to 1.48 billion euros.
The company’s intention is to apply a dividend policy that targets an initial payout of 220 million euros in 2012.
JPMorgan and Morgan Stanley (MS) are managing the IPO as global coordinators, with Deutsche Bank AG (DBK) and UBS AG (UBSN) acting as joint bookrunners. Nomura Holdings Inc. (8604), HSBC Holdings Plc (HSBA), ABN Amro Group NV and Rabobank Group (RABO) are joint lead managers and Societe Generale (GLE) is co-lead manager.
Based on the price range, the offering could raise 664.1 million euros to 744.6 million euros, assuming full exercise of the over-allotment option. First trading is expected to start on March 21.
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