Ardagh Pulls Share Sale on Tough IPO Market in U.S.by
Company says had virtually completed preparations for IPO
Ardagh says would not be wise to proceed at the moment
Ardagh Group SA pulled a planned share sale of its metal-containers unit, citing “challenging” market conditions for initial public offerings in the U.S.
Preparations for the IPO of the unit, known as Oressa Ltd., had been “virtually completed” before they were put on hold for now, according to a statement on Monday. The company had previously planned to sell a minority stake before the end of the year, depending on market conditions.
“The IPO market is as such where investors are demanding big discounts,” Chairman Paul Coulson told credit analysts on a call today. “It’s got nothing to do with trading, nothing to do with leverage whatsoever.”
Coulson, who is one of the biggest shareholders in Ardagh, joins fellow Irishman and Digicel Group Ltd. billionaire founder Denis O’Brien in pulling an IPO designed to cut debt and fund further growth. Also one of the nation’s richest men, Coulson amassed billions of dollars of high-yield, high-risk debt for Ardagh as he powered through 10 acquisitions to create one of the world’s biggest packaging companies.
Ardagh’s decision to delay the share sale “highlights the challenges facing levered companies trying to complete IPOs,” said David Holohan, an analyst with Merrion Capital in Dublin. “After Digicel pulled their IPO and subsequent reduced pricing for other listings, the odds of Ardagh moving ahead with their own reduced.”
Of the IPOs announced this year, 55 have been postponed globally, according to data compiled by Bloomberg. That’s about double the value of the 22 deals pulled in 2014.