Prada May Mirror Samsonite’s IPO as Shares Fall in Gray Market Trading
Prada SpA may decline when it begins trading this week, following in the footsteps of companies such as Samsonite International SA that struggled to woo investors in Hong Kong debuts, premarket trading shows.
Prada shares fell as much as 2.5 percent to HK$38.50 to HK$39 in over-the-counter trading yesterday, said two people with knowledge of the transactions brokered by Jefferies Group Inc. (JEF) Prada sold shares in the IPO at HK$39.50 each, raising $2.14 billion.
“The fact that Prada will probably be trading down when it opens underlines the overall change of sentiment in Hong Kong’s IPO market,” said Josef Schuster, founder of Chicago-based IPOX Schuster LLC, which oversees about $2.5 billion. “You don’t see the initial pops anymore.”
Shares of the Milan-based luxury-goods maker are scheduled to start official trading on the Hong Kong Stock Exchange on June 24. Prada priced the stock below the middle point of the range used to canvass investors after a five-week slump on the benchmark Hang Seng Index. (HSI) Samsonite, which raised $1.25 billion in its IPO after scaling back the sale, dropped 7.7 percent on its first day of trading last week.
The gray market is an over-the-counter venue for the unofficial buying and selling of securities between institutions before their listing on a stock exchange. Prada’s shares were actively traded in the gray market, said one of the people, who declined to give a specific figure for the volume.
The Hang Seng Index added 0.3 percent today, paring losses in the past month to 5.6 percent. The gauge earlier this week slipped to its lowest level since September.
A spokesman for Prada in Milan declined to comment yesterday. A call to Jefferies’ Hong Kong office outside of normal business hours wasn’t answered and a spokeswoman in London wasn’t immediately available to comment.
“The fact that Prada got the deal done is positive. It wouldn’t be able to do it in Europe,” said Schuster. “It’s still a sensible move for them.”