Pandora lists in strong $2bn market debut

 
City A.M. Reporter
Pandora, the Danish jeweller, made a strong debut in one of Europe’s largest bourse listings this year, worth up to $2.1bn (£1.3bn), as investors bought into prospects for its main product – charm bracelets.

Analysts said Pandora’s high growth and strong margins made its initial public offering (IPO) attractive to investors hungry for new stock after a period of scant IPO activity, despite its short track record and heavy reliance on a single product.

Pandora, which has former Asda and Post Office boss Allan Leighton as its chairman, sells mass-market jewellery mainly in the United States and Europe that is priced between £100 to £900.

Shares in Pandora, which manufactures jewellery relatively cheaply in Thailand where it employs the bulk of its 4,500 staff, at one point traded 20 per cent above the 210 crowns (£24.50) per share offer price.

Pandora priced its Copenhagen IPO at the high end of a previously indicated range of 175-225 crowns.

Sydbank analyst Soren Lontoft Hansen said the IPO price was “fair” but assumes strong prospects for the firm.

Pandora, established as a Copenhagen shop in 1982, has grown briskly over the past decade, with sales of around €465m (£404m) in 2009.

The IPO values Pandora, which made 86 per cent of first-half sales from bracelets and charms, at about $5bn and makes the listing one of the top five largest in Europe this year.

The shares debuted at 225 crowns and climbed as high as 251.90 crowns before cooling to 247.50 crowns -- still up nearly 18 per cent from the IPO price -- in unusually heavy volumes.

“The idea is to make [this] into one of the most successful branded companies in jewellery and luxury goods,” said chairman Allan Leighton.

ROTHSCHILD

ROTHSCHILD was among the lead advisers to Danish jewellery firm Pandora that surprised markets with its strong debut yesterday.

“We thought investor appetite would be good because this is a company that is growing strongly and still has the emerging markets to expand into,” said a banker connected to the deal. But the strength debut certainly exceeded our expectations.”

Danish private equity firm Axcel, and the Enevoldsen family who launched the business in 1982, sold just under 36 per cent of their holding in the business. This will rise to 41 per cent if demand for the shares exceeds the original amount offered. City heavyweight Allan Leighton was drafted in as chairman over the summer.

“Whenever you bring Allan into a project he inevitably puts his stamp on it,” said the banker. “He has a lot of international experience and he will bring this to bear as the company seeks to expand into emerging markets in Brazil and eastern European.”

Goldman Sachs, JP Morgan, Morgan Stanley and Nordea were joint global coordinators and bookrunners for the IPO, while Carnegie and SEB were co-lead managers. FIH Partners were also advisers.