Multimedia Plans to Sell $310 Million Stake in Warsaw IPO

Multimedia Polska SA owners seek to raise as much as 948.3 million zloty ($310 million) from the sale of Poland’s third-largest cable TV operator in the country’s biggest initial public offering since December.

M2 Investments Ltd., controlled by Tomasz Ulatowski and Ygal Ozechov, as well as Tri Media Holdings Ltd., Dunaville Trading Ltd. and Collegium Anetta Kolasinska i Wspolnicy set the maximum price for retail investors at 21 zloty per share, the Gdynia, Poland-based company said in a prospectus today. Owners seek to sell 45.2 million shares, or a 49 percent stake.

Multimedia will return to public trading after its owners delisted it from the Warsaw Stock Exchange in 2011, taking advantage of low valuation and starting a search for an industry investor. In 2012, Multimedia hired JPMorgan Chase & Co. to help it find a buyer and dropped the plan the same year. The IPO is the biggest since Poland sold a 2.17 billion-zloty stake in Energa SA in December, data compiled by Bloomberg show.

“Our dividend is what we want to attract new investors with,” Chief Executive Officer Andrzej Rogowski said at a news conference in Warsaw today. “We plan to pay out our entire 2013 profit as a dividend and our policy will be to return 100 percent of profit to shareholders in the coming years.”

Rising Sales

From 2011 to 2013, Multimedia increased sales 12 percent as it boosted its customer base, while net income dropped 31 percent. In the first three months of this year profit fell further, by 12 percent to 12.6 million zloty.

“Our profit will rise in the coming years,” Rogowski said.

Bookbuilding for institutional investors started today and ends on May 28. The company plans to begin trading on the Warsaw bourse on June 11. Owners and Multimedia won’t sell more shares within 180 days, according to the prospectus. The minimum price in the sale was set at 16.25 zloty, Rogowski said.

After the IPO, current shareholders will get funds to repay about 212 million zloty of debt they owe Multimedia, according to the CEO. “Together with 300 million zloty of bank loans, we will have enough funds to take part in the consolidation of the local market,” he said.

Multimedia competes for TV subscribers with local units of Liberty Global Plc and Vivendi SA, and for Internet users with companies such as Orange SA. Warburg Pincus LLC became a strategic minority investor last year in Inea SA, the fourth-largest Polish cable operator.

Market Consolidation

Europe’s communications market is consolidating as Vodafone Group Plc in March agreed to buy Spanish cable operator Grupo Corporativo Ono SA. Billionaire John Malone’s Liberty agreed to take full control of Dutch broadband provider Ziggo NV for $6.7 billion in January, while French cable carrier Numericable SA won a bid to combine with Vivendi’s SFR wireless unit in March.

UBS AG is the IPO’s global coordinator and bookrunner. UniCredit SpA is a joint bookrunner and offering agent while Raiffeisen Centrobank AG is acting as a joint lead manager, according to Multimedia’s prospectus.

Companies and their owners have raised $29.8 billion in share offerings on the Warsaw bourse since 2008, 79 percent of the total in the region and 4.5 times as much as in Moscow, according to data compiled by Bloomberg. With 54 IPOs worth 1.1 billion euros ($1.5 billion) last year, Warsaw was second in Europe behind London by number of offerings and fifth by value, according to a report by PricewaterhouseCoopers LLP.

Chinese automotive parts manufacturer JJ Auto AG, Polish chemicals producer PCC Rokita SA and aluminum casting alloys maker Alumetal SA are among companies planning to sell shares in IPOs in Poland in coming weeks. Ten companies have started trading on the Warsaw Stock Exchange’s main market this year, compared with 23 in 2013, according to the bourse’s website.