German Perfumery Chain Douglas Sets IPO Price at 26 Euros: What Investors Need to Know

2024-03-19 20:56:42

The offer price for the German perfumery chain Douglas is 26 euros per share. This is at the lower limit of the price range. The IPO is scheduled to take place on Thursday.

The German perfumery chain Douglas has to settle for the lowest possible issue price when it returns to the stock exchange. The company announced on Tuesday evening that the offer price had been set at 26 euros per share. Even before the end of the subscription period, the accompanying investment banks had informed investors that the 34.2 million shares would probably be issued at the lower limit of the price range of 26 to 30 euros.

At this price, the issue was many times oversubscribed, according to the message to investors. This means that the company will have a market capitalization of 2.8 billion euros when it goes public. Including debt, the company will be valued at almost 5 billion euros following the IPO.

IPO on Thursday

On Thursday, Douglas shares will be traded on the Frankfurt Stock Exchange for the first time in more than ten years. At that time, the financial investor Advent, together with the owner Kreke family, took the company off the stock market and later passed it on to rival CVC, which holds 84 percent of the shares.

Douglas will receive a gross amount of 850 million euros from the IPO – regardless of the price – which will be used to reduce debt. The higher the price, the fewer new shares are issued. The rest of the total proceeds – almost 50 million euros – goes to Douglas managers around CEO Sander van der Laan. They want to use the money to pay taxes on the shares they received as part of a participation program.

Financial injection of 300 million euros

CVC and the Kreke family are giving Douglas an additional financial injection of 300 million euros as part of the IPO so that the company can reduce its debts from 3.4 billion to 2.1 billion euros. After the IPO, 31.8 percent of Douglas is in the hands of new shareholders. CVC diluted its shareholding from 84 to around 55 percent, the Kreke family reduced its share from 16 to a good ten percent. Neither sells any shares during the issue.

Whether Douglas’ IPO is enough to give other candidates enough confidence to venture onto the stock market depends on the performance of the share following its initial listing.

Things are going better for the Swiss skin care group Galderma so far: the banks indicated an issue price of 53 francs on Tuesday – at the upper end of the range. The first newcomer to the Frankfurt stock exchange of the year, the tank gear manufacturer Renk, has now almost doubled its issue price of 15 euros. The fuel card provider DKV Mobility and the long-distance bus operator Flix are in the starting blocks. The Oldenburgische Landesbank also sees itself as ready to go public. According to insiders, the scientific publisher Springer Nature is considering making a new attempt in the fall. (APA/Reuters)

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