Com Hem AB (COMH), a Swedish cable operator, gained on its first day of trading after raising 5.67 billion kronor ($850 million) in the Nordic region’s second-largest initial public offering this year.
The stock rose as much as 11 percent to 64.40 kronor and traded at 63.40 kronor at 10:46 a.m. in Stockholm, valuing the company at about $2 billion. Com Hem sold shares at 58 kronor apiece, near the top of its estimated price range.
Demand in the IPO outstripped supply, signaling investors are projecting Com Hem can keep adding users for its video and Internet services. The cable provider is increasing broadband speeds over its network and has struck agreements with TiVo Inc. and Netflix Inc. to offer video on demand.
“We dont’t need more capital, but it’s a good opportunity to take in more capital and reduce debt given how strong the markets are and that’s what we decided to do,” Chief Executive Officer Anders Nilsson said in an interview at the Stockholm stock exchange, where he rang the opening bell.
European issuers had the busiest first half of the year for IPOs since 2011, raising about $33 billion, data compiled by Bloomberg show. Denmark’s ISS Holding A/S, the world’s largest cleaning company, raised $1.5 billion in its IPO in March, and OW Bunker A/S, a marine-fuel provider, raised about $500 million the same month.
Get AS, Norway’s second-largest cable operator, has also been put up for sale.
Still, not all IPO plans are succeeding in the crowded market. Eastern Europe’s largest budget carrier Wizz Air Holdings Plc pulled its share sale this week, citing unpredictable conditions in the industry.
Com Hem, which 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.
Com Hem has also added new businesses, buying Phonera Foretag AB this year to gain products for small companies.
BC Partners, which acquired Com Hem in 2011 for 1.7 billion euros ($2.3 billion), won’t sell its shares as part of the offering. It’ll keep a stake of about 50 percent.
The proceeds from the IPO may increase by 567 million kronor if the IPO’s managers exercise an over-allotment option in full, Com Hem said. JPMorgan Chase & Co., Morgan Stanley and Nordea Bank AB are managing the transaction.