Hapag-Lloyd Gives More Time to IPO Investors Spooked by Maersk

  • German shipper extends stock offer period by a week to Nov. 3
  • Danish competitor Maersk cut 2015 earnings forecast by 15%

Hapag-Lloyd AG, Germany’s biggest shipping line, put off its planned initial public offering Friday after a bleaker profit forecast by global industry leader A.P. Moeller-Maersk unnerved investors.

Hapag-Lloyd extended the offer period by one week to Nov. 3, according to a statement on Tuesday, leaving open when the Hamburg-based company intends to start trading. A spokesman declined to comment further. According to a term sheet that came out before Tuesday’s announcement, the IPO was likely to be priced at the bottom of a range of 23 euros to 29 euros a share.

Copenhagen-based Maersk, citing the effects of slowing economic growth on the shipping industry, reduced its underlying-profit forecast for this year by 15 percent on Oct. 23 to $3.4 billion, sending its shares to a two-year low. Hapag-Lloyd responded on Monday by affirming its 2015 forecast.

“Some people obviously got spooked by the Maersk announcement,” Lee Klaskow, a senior logistics analyst at Bloomberg Intelligence, said by phone. “They are trying to do a transaction against the backdrop of an extremely weak environment.”

Hapag-Lloyd’s plan to list stock by the end of 2015 is part of a shareholder agreement from the company’s merger last year with the container-shipping operations of Valparaiso, Chile-based Cia. Sud Americana de Vapores SA.

Shipping Pricing

Average shipping rates for containers fell 36 percent in the third quarter, according to the World Container Index.

“Across all major routes, volumes and rates remain weak, with Asia-Europe rates affected the most due to overcapacity,” Klaskow and Bloomberg Intelligence analyst John Mathai wrote in a report Tuesday.

Hapag-Lloyd is less exposed than Maersk to Far East trade, with 17 percent of its fleet operating on that route compared to about a quarter of the Danish shipper’s vessels, according to the German company. Michael Christian Storgaard, a Maersk Line spokesman, said the carrier had a 23 percent share of Asia-Europe trade routes at the end of June, declining to specify what proportion of its vessel capacity operates in that market.

Investors still seem nervous about the potential effects of China’s economic slowdown on Hapag-Lloyd, said Klaskow.

“Given that they are seen to price at the lower end of the range and pushing back the offer date indicates that they are still trying to build a solid IPO order book,” he said.

It’s the second time this month that Hapag-Lloyd is adjusting its IPO plan. It scaled back the listing by 40 percent in mid-October to $300 million, targeting the sale of 15.7 million shares.

German tourism operator TUI AG, which holds 14 percent of the company, plans to sell as many as 4.2 million existing shares, including 1.9 million shares in a potential over-allotment to meet any excess demand. Based on a book value of about 33.59 euros per Hapag-Lloyd share derived from figures for the total stake as of June 30, TUI would incur a book loss exceeding 10 euros a share should the offering be priced at 23 euros.

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