(Jan 20): Defence firm Czechoslovak Group AS is considering setting a price in an accelerated initial public offering (IPO) that would value the company at about €25 billion, according to people familiar with the matter.
The armoured vehicle and munitions maker is planning to start trading in Amsterdam as soon as the end of this week, the people said, asking not to be identified as the information is private. Order taking for the offering could start as soon as Tuesday and end as soon as Thursday, the people said. The company had been considering a valuation of as much as €30 billion, Bloomberg News reported previously.
A three-day window for orders would be unusually short for an IPO the size of CSG, which announced its intention to float last Wednesday. Faster timelines can help companies reduce so-called market risk, in which sudden changes in investor sentiment could disrupt an IPO process.
The valuation, timing and structure of the listing could still change, the people added. A representative for CSG declined to comment.
The company had already been looking at a relatively tight timeline as it was planning to start trading as soon as the end of January, Bloomberg News previously reported.
Going public is a lengthy process for companies that includes months of preparation. The timeline for executing such deals in Europe — which includes meetings with investors before a price range is set, then formal order taking — has been shortened by some companies from the traditional four-week duration in recent years, as they look to minimize market risk.
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CSG’s offering is set to take advantage of a rally in defence stocks, which has continued at the start of this year in the wake of US actions in Venezuela and rhetoric around Greenland. A basket of European defence stocks compiled by Goldman Sachs Group Inc has more than tripled over the past two years, and extended gains on Monday.
The company and its owner Michal Strnad could seek €3 billion to €4 billion in total through the offering, Bloomberg News reported previously. The Prague-based firm said last week it plans to sell €750 million of new shares in an IPO in Amsterdam. Strnad will also sell an undetermined amount of existing shares in the deal.
Cornerstone investors Artisan Partners, BlackRock and a subsidiary of the Qatar Investment Authority have committed to take up a combined €900 million of the offering.
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BNP Paribas SA, Jefferies Financial Group Inc, JPMorgan Chase & Co and Unicredit SpA are arranging the deal.
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