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Hapag Lloyd IPO goes ahead, priced at low end of revised range

Published 03/11/2015, 18:15
Updated 03/11/2015, 18:20
© Reuters.  Hapag Lloyd IPO goes ahead, priced at low end of revised range

FRANKFURT (Reuters) - German shipping group Hapag-Lloyd [HPLG.UL] priced its initial public offering (IPO) at the low end of a revised range, giving the group a market capitalisation of about 2.4 billion euros (£1.71 billion) or less than half the original target.

Hapag-Lloyd shares were sold at 20 euros ($21.92) apiece, the German shipping company said on Tuesday, confirming an earlier Reuters report.

The company had originally targeted a market cap of more than 5 billion euros, but in wobbly markets offered shares for 23-29 euros each.

Weak demand later prompted it to postpone the IPO, trim the number of shares on offer and lower the price range to 20-22 euros.

Several large investors had cancelled share orders after a profit warning from peer Maersk (CO:MAERSKb) rocked already jittery markets.

Maersk Line, the world's largest container shipping company which transports a fifth of all goods on the busiest routes between Asia and Europe, has been hit by overcapacities and a slump in freight rates.

Hapag-Lloyd is also suffering from the slowdown in global trade, but it is less exposed to the Asia-Europe route than Maersk and other peers as it focuses on the Europe-North America routes, which have benefited from a strong U.S. dollar.

Amid volatile markets, several other German groups recently curbed their capital-raising ambitions, including plastics maker Covestro (DE:1COV) and automotive supplier Schaeffler (DE:SHA).

Real estate Corestate cancelled its IPO on Tuesday.

Hapag-Lloyd raised around $300 million from selling just over 13 million new shares, while shareholder TUI (L:TUIT) offered 2 million shares in an overallotment option.

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Part-owner Klaus-Michael Kuehne and Chilean partner CSAV (SN:VAP) placed orders worth $30 million each.

Hapag-Lloyd plans to make its market debut in Frankfurt on Friday.

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