Com Hem Gets Orders for All Shares Offered in $850 Million IPO

Com Hem AB, the Swedish cable operator owned by BC Partners Ltd., attracted enough orders for all the shares on sale in its initial public offering seeking to raise about 5.67 billion kronor ($850 million).

The demand was disclosed in terms of the sale seen by Bloomberg News. Com Hem is offering new shares at 44 kronor to 62 kronor a piece, according to a document published yesterday. The IPO, the Nordic region’s second-largest this year, is set to give the Stockholm-based company an equity value of as much as 11.9 billion kronor, or about $1.8 billion.

Private-equity shareholders are taking public companies they bought since the financial crisis as investors return to Europe’s IPO markets, which raised about $32 billion since the start of the year, the most in the period since 2011, according to data compiled by Bloomberg. BC Partners, which acquired Com Hem in 2011 for 1.7 billion euros ($2.3 billion), won’t sell shares as part of the offering.

Cable companies are still in demand in a crowded sellers’ market. Real-estate company Domus NV in the Netherlands and U.K. retailer Fat Face Group Ltd. postponed their IPOs last month, citing market conditions.

ISS Holding A/S, the world’s largest cleaning company, raised about $1.5 billion in an IPO in March. Get AS, Norway’s second-largest cable operator, has also been put up for sale.

Com Hem Chief Executive Officer Anders Nilsson, appointed this year, will use the proceeds to repay debt as the company added new businesses to combat stagnating sales. Com Hem is increasing broadband speeds over its cable network and has struck agreements with TiVo Inc. and Netflix Inc. to offer video-on-demand. Its acquisition of Phonera Foretag AB this year added products for small businesses.

Dividend Plan

The company doesn’t plan to make any purchases after its IPO, Nilsson said in an interview. French cable company Numericable Group SA used improved leverage from an IPO in November to help make an offer for phone carrier SFR this year in a deal valued at more than 17 billion euros.

“We have a plan which is an organic growth plan, and that’s what we’re going to execute,” Nilsson said. “We will use the proceeds to pay down debt into a range we are comfortable with.”

Com Hem will pay investors 50 percent of free cash flow through dividends or other means, providing that it keeps its debt levels within its target range, Nilsson said.

Com Hem will sell 91.4 million to 128.9 million new shares. The company has also authorized an over-allotment option to increase the number of shares sold by 10 percent, which would boost the amount raised to 6.24 billion kronor, it said. The shares will begin trading on the Stockholm exchange on June 17.

The cable carrier, which said it connects to about 39 percent of homes in Sweden, reported first-quarter underlying Ebitda of 545 million kronor. Sales were little changed at 1.12 billion kronor as the number of unique subscribers increased 1.8 percent to 838,000, it said in a May 2 statement.

JPMorgan Chase & Co., Morgan Stanley and Nordea Bank AB are managing the transaction.

To contact the reporters on this story: Ruth David in London at rdavid9@bloomberg.net; Adam Ewing in Stockholm at aewing5@bloomberg.net; Amy Thomson in London at athomson6@bloomberg.net

To contact the editors responsible for this story: Kenneth Wong at kwong11@bloomberg.net Mark Beech, Ville Heiskanen

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