April 2, 2023

DealBook: Shares of Moleskine Fall Modestly in Trading Debut

Moleskine's leather-bound notebooks have been used by the likes of Picasso and van Gogh.Fred R. Conrad/The New York TimesMoleskine’s leather-bound notebooks have been used by the likes of Picasso and van Gogh.

12:52 p.m. | Updated LONDON – From Hemingway to the public markets, shares of the vintage notebook company Moleskine fell modestly on the first day of trading on Wednesday after the Italian company raised $314 million through an initial public offering.

Moleskine, whose leather-bound notebooks have been used by the likes of Picasso and van Gogh, is the latest European company to turn to the capital markets despite recent uncertainty caused by the bank crisis in Cyprus.

Backed by the private equity firm Syntegra Capital, the Italian notebook maker also is the first company to list on the Milan stock exchange since the luxury clothing designer Brunello Cucinelli raised just over $200 million in April 2012.

Faced with renewed investor interest in equities, European companies and their backers have been quick to take advantage.

The total value of I.P.O.’s across the Continent doubled in the first quarter of the year, to $7 billion, compared with the period a year earlier, according to the data provider Dealogic.

The new offerings have been spread across a number of industries, though real estate I.P.O.’s have garnered particularly attention. The German property company LEG Immobilien, which is owned by the Goldman Sachs investment fund Whitehall, pocketed 1.3 billion euros ($1.7 billion) in the Continent’s largest I.P.O. during the first quarter.

Moleskine, whose backers also include the European venture capital firm Index Ventures, said last week that it had priced its new offering at 2.30 euros a share, which was the midpoint of the expected price range.

In trading in Milan on Wednesday, its shares rose as much as 3.9 percent before falling back slightly by early afternoon. It closed at 2.28 euros a share, down .87 percent from its offering price.

Goldman Sachs, UBS and Mediobanca managed the offering for Moleskine.

Article source: http://dealbook.nytimes.com/2013/04/03/shares-of-moleskine-rise-in-trading-debut/?partner=rss&emc=rss

DealBook: Stock Offering by Japan Airlines Is Overshadowed by Protests

TOKYO — Japan Airlines returned to the stock market on Wednesday after the biggest initial public offering this year since Facebook, but the carrier’s debut was overshadowed by anti-Japanese protests in China that has hurt travel between the two countries.

JAL shares failed to sustain a rally in their opening minutes on the Tokyo Stock Exchange, settling at around 3,830 yen ($48.56) after 90 minutes of trade, barely above its 3,790 ($48.05) offering price that valued the airline at $8.5 billion. That performance came as somewhat disappointing after JAL shares had jumped as much as 10 percent in the gray market and underscored investor anxiety over the airline’s potential in a notoriously volatile industry.

Shares in Japan’s former flagship carrier had been priced at the top of a range set deliberately low to stoke investor interest in the airline’s re-listing, just 30 months after its bankruptcy in 2010. By setting a low target, JAL hoped to avoid the fate of Facebook, which misjudged investor demand and saw its share price slump below its offering price on its second day of trade.

But Tokyo-based JAL also found itself under pressure to raise ample funds to return to state coffers the 350 billion yen ($4.4 billion) in bailout money it received to finance its corporate turnaround. With its I.P.O., JAL doubled the investment that a state-backed fund made in the carrier in 2010. That fund, the Enterprise Turnaround Initiative Corporation of Japan, is thought to have sold its 96.5 percent stake in JAL, netting a $4 billion profit.

JAL’s offering caps two years of intense reorganization that eliminated 21,000 jobs or about a third of the airline’s work force, cut pilots’ salaries by 30 percent, slashed pensions and retired the company’s prized jumbo jets. It dropped a third of its international routes and halved the number of its group companies.

Its balance sheet is now the envy of the industry, its 17 percent operating margin for the latest fiscal year are more than double that of the likes of Delta, United Continental and JAL’s domestic nemesis, All Nippon Airways.

But JAL has also become a far smaller airline with a more limited global reach and capacity that may be ill-positioned to tap into growth, especially in Asia, where the aviation industry is most likely to have its fastest growth. Earnings at the airline have shrunk in line with its cuts: operating revenue fell by almost 40 percent between 2008 and 2011 to 1.2 trillion yen, and a further drop in earnings is projected for the current fiscal year.

Reflecting its shrunken ambitions, JAL’s fleet of 169 aircraft is now made up of mid and small planes like the Boeing 787. The downsized fleet helps cut costs and raise profitability now but could limit growth in the long run, especially compared with regional rivals like the Emirates and Singapore Airlines, which are investing aggressively in their fleets.

JAL is also struggling to reposition itself against the rise of low-cost carriers in Asia, which are finally starting to make forays into Japan’s highly-protected domestic market. JAL introduced JetStar, a low-cost venture with Qantas Airways, just two months ago.

JAL benefited in its turnaround from a write-down of its fleet, government-arranged debt waivers and $4.5 billion in tax credits allowing the airline to offset corporate tax for almost a decade.

These measures have sparked intense criticism from All Nippon Airways, which has lobbied politicians to level the playing field by prioritizing it over JAL in coveted landing slot allocations at Tokyo’s airports. If Nippon is successful, JAL could lose air traffic.

In midterm financial targets, JAL has pledged to keep its operating margin at 10 percent. It issued 175 million shares in its I.P.O., of which 131.25 million have been allocated to Japanese investors and the remaining 43.74 million to investors overseas.

The I.P.O.’s of Facebook and JAL have ranked among the year’s most highly anticipated offerings. But both companies have faced some tough luck beyond their control. Facebook’s debut was marred by technical errors.

JAL’s first day of trade in Tokyo came amid raging anti-Japanese protests in China over competing claims to a set of disputed islands, a spat that threatens to depress travel between the two countries.

Both Chinese and Japanese officials have called for calm after protesters staged rallies in more than 100 Chinese cities, vandalizing Japanese businesses and forcing some Japanese manufacturers to suspend operations.

Article source: http://dealbook.nytimes.com/2012/09/18/big-stock-offering-by-japan-airlines-is-overshadowed-by-chinas-anti-japanese-protests/?partner=rss&emc=rss

Fleeing to Foreign Shores

But it found little investor interest in the United States for an early-stage medical device company that had not yet made a profit.

Reva Medical did what a small but increasing number of young American companies are doing — it looked abroad for money, in Reva’s case the Australian stock exchange.

After an eight-month road show, meeting investors and pitching the prospects of a biodegradable stent, the 12-year-old company sold 25 percent of its stock for $85 million in an initial public offering in December.

“There are so many companies that require capital like our company, and they don’t have access to the capital markets in the United States,” said Robert Stockman, Reva’s chief executive. “People are looking at any option to stay alive, which is what we did.”

Reva’s example shows that nearly three years since the financial crisis began, markets in the United States are barely open to many companies, leading them to turn to investors abroad. Denied a chance to list their stock and go public here, they are finding ready buyers of their shares on foreign markets.

Nearly one in 10 American companies that went public last year did so outside the United States. Besides Australia, they turned to stock markets in Britain, Taiwan, South Korea and Canada, according to data from the consulting firm Grant Thornton and Dealogic.

The 10 companies that went public abroad in 2010 — and 75 from 2000 to 2009 — compares with only two United States companies choosing foreign exchanges from 1991 to 1999.

The trend reflects a decidedly global outlook toward stocks, just as the number of public companies in the United States is shrinking.

From a peak of more than 8,800 American companies at the end of 1997, that number fell to about 5,100 by the end of 2009, a 40 percent decline, according to the World Federation of Exchanges.

The drop comes as some companies have merged, or gone out of business, or been taken private by private equity firms. Other young businesses have chosen to sell themselves to bigger companies rather than go public.

To be sure, as the economy improves and investors shaken badly by the financial crisis begin to regain their confidence, American stock markets may once again open up for companies trying to go public and listings may rise in the United States.

LinkedIn, the social networking site for business professionals, had a successful initial public offering last month on the New York Stock Exchange, and Groupon, the social buying site, has registered its plans to go public in the United States.

But these are big companies, enjoying the popularity of being Internet darlings. Executives and analysts fear that a long-term structural shift in American equity markets means these markets are now closed to legions of smaller, more ordinary businesses. They could more easily have gone public in the United States in the past. But they now remain private or, for the time being, have to market themselves overseas and rely on foreign investors.

For example, initial public offerings by American companies totaled only 119 in the United States last year, according to Dealogic — higher than the depressed rates of the previous two years but a far cry from the 756 companies that went public at the peak in 1996.

As young, fast-growing companies are forced to look overseas for public status and investors, executives and analysts fear that they may increasingly shift their geographic focus — and as a result any jobs they create will be abroad.

“Issuers have to put themselves through a grinder to go overseas, so any significant percentage of overseas listings is a sign that our markets have become hostile to innovation and job formation,” said David Weild, a former vice chairman of the Nasdaq stock exchange and a senior adviser to Grant Thornton.

A variety of factors explain each company’s decision to list on a foreign exchange, like the increased regulatory costs of going public in the United States. Underwriting, legal and other costs are typically lower in foreign markets, companies say.

Article source: http://feeds.nytimes.com/click.phdo?i=41b1dff1820ed5e0ed6b52a776b66546

DealBook: Freescale Prices Its I.P.O. at $18 a Share

It hardly seems possible in the current environment where investors are clamoring for newly public companies like LinkedIn and Yandex.

But Freescale Semiconductor Holdings, the chip maker acquired in 2006 in one of the largest technology buyouts ever, cut the price for its offering to $18, people briefed on the matter told DealBook on Wednesday. That’s at the bottom of its already lowered price range.

Just recently, the company disclosed that its initial public offering could raise more than $1 billion. On Wednesday, Freescale raised just $783 million, reflecting weak investor demand.

Freescale is among a number of private equity-backed companies moving to go public in recent months, with buyout firms looking to exit deals they made at the height of the boom. A group of firms, including the Blackstone Group, TPG Capital, the Carlyle Group and Permira Advisers, bought Freescale in 2006 for $17.6 billion, a deal that was called “one of the ugliest buyouts ever.”

In many ways, Freescale looks like a number of private equity-owned companies that have recently gone public, including hospital operator HCA and Nielsen Holdings, the consumer ratings company.

Amid a heft debt load, Freescale has struggled to sustain profitability. Last year, the company notched a net loss of $1 billion in 2010, compared with a $748 million profit in 2009. The company, which sold 43.5 million shares on Wednesday, has said it plans to use the proceeds and cash on hand to help pay off its debt.

But investor interest for HCA and Nielsen was stronger. In early January, Nielsen priced its shares at $23, compared with earlier estimates of $20 to $22 a share. In March, HCA priced at the high end of its range.

By comparison, Freescale had to drop its price to attract investors. The offering of $18 a share came in far below initial expectations of $22 to $24.

Citigroup, Deutsche Bank, Barclays Capital, Credit Suisse and JPMorgan Chase are the main underwriters on the Freescale offering.

Article source: http://feeds.nytimes.com/click.phdo?i=cc8283e685168869cef133cbd6f6d575