CVC to List Matas in First Danish Private Equity IPO Since 2010

CVC Capital Partners Ltd. plans to sell a stake in drugstore chain Matas in Denmark’s first initial public offering through a private equity firm since 2010.

Morgan Stanley and Nordea Bank AB will be joint global coordinators and bookrunners in the sale, Alleroed, Denmark-based Matas said today in a statement to the stock exchange. The company didn’t disclose the amount the owners plan to raise or the size of the stake being offered. The deal values Matas at about 6 billion kroner ($1 billion), a person familiar with the deal said yesterday.

Private equity firms have hesitated to list Danish companies after the IPO of Pandora A/S, according to Per Hansen, a strategist at Nordnet AB. Following the Glostrup, Denmark-based jewelry maker’s 2010 listing, its shares dropped more than 85 percent in the first 12 months of trading.

“Private equity funds need a success due to Pandora,” Hansen said in a telephone interview. The Matas “share sale will set a precedent for private equity firms.”

The Matas offering will be the first IPO on the Nasdaq OMX Copenhagen stock exchange since 2011, when Danske Andelskassers Bank A/S sold shares. The sale will include stakes owned by Matas’s two biggest shareholders: a unit controlled by London-based CVC as well as Materialisternes Invest ApS, Matas said.

‘Low Enough’

“CVC will have to set the share price low enough to guarantee success knowing that they will have to go back to the market at a later point to sell the remaining shares in Matas as well as other companies,” Hansen said.

IPOs in Europe, the Middle East and Africa have raised $7.4 billion this year, compared with about $4 billion in the same period last year, data compiled by Bloomberg show.

“The activity in alternative investments such as IPOs, green energy and corporate bonds is at its highest in a long time,” said Jesper Langmack, the chief investment officer at Copenhagen-based PFA Pension, which manages $55 billion. “Corporate finance outfits are very busy these days.”

European stocks are poised to complete the longest streak of monthly gains since at least 1997 as investor sentiment picks up amid central-bank stimulus and better-than-estimated U.S. economic data.

The Vstoxx Index, which measures volatility in European equities by tracking the cost of options on the Euro Stoxx 50 Index, slipped 44 percent in the past 12 months and dropped to six-year low in January.

Buy Side

Denmark’s benchmark OMXC20 Index has advanced 8.9 percent this year, compared with a 7.9 percent gain in the STOXX Europe 600 Index.

Matas, Denmark’s biggest drugstore chain with 293 outlets, had revenue of 3.2 billion kroner in the 12 months that ended March 31, a 3.3 percent advance from a year earlier. Adjusted profit after tax rose 20 percent to 336 million kroner, the company said in today’s statement.

“We’re positive towards buying into Matas, though it’s all about settling at the right price,” Langmack at PFA said. “We like the company and its management and believe it has a strong market position and good business model.”

Carnegie Investment Bank AB, Danske Bank A/S and SEB AB will act as co-lead managers in the sale, Matas said.

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