VW's Traton shares limp on stock market debut (updated)
28/06/2019 13:07
* VW lists 11.5% stake in trucks division Traton
* Shares dip following stock market debut
* VW says listing makes expansion steps possible
(Adds valuation, CEO quotes)
FRANKFURT, June 28 (Reuters) - Traton 8TRA.DE 8TRA.ST
made a lacklustre start on its debut on Friday, as shares in
Volkswagen's VOWG_p.DE truck unit slipped below their initial
public offering price.
The stock opened at 27 euros ($30.75), the IPO price in
Europe's second-largest listing of the year, before slipping to
trade as much as 2.4 percent lower. Germany's benchmark DAX
index was up 0.5% at 1200 GMT.
Weak demand for German listings had forced VW to scale back
its Traton IPO and it had already priced the offering at the low
end of its target range.
"At first glance, markets don't look that bad. But volumes
have been low as risk averse investors hoard cash," a banker
working on the deal said.
The average daily turnover of Stoxx600 .STOXX shares stood
at 470 billion euros so far this year and the June median was
439 billion euros, compared with the 2018 daily average of
almost 600 billion.
Global IPO volumes are down 30% in the year so far,
Refinitiv data shows, while the European figure is at its lowest
level since 2012 amid concern about the global economic outlook.
Online fashion retailer Global Fashion Group slashed its IPO
offer price on Wednesday, citing "current market conditions".
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Volkswagen floated 11.5% of Traton's shares after initially
seeking to list a stake of up to 25% in a bid to put the
company's truck business on an independent footing.
The deal values Traton at 7.9 and 7.0 times its 2019 and
2020 earnings before interest and taxes, respectively, roughly
in line with the valuation of its peer Volvo VOLVb.ST , two
people close to the matter said.
The 1.55 billion euros ($1.77 billion) in proceeds from the
offering will flow to parent Volkswagen which aims to use the
funding to invest in mass producing electric cars.
Traton, which includes the MAN, Scania and Volkswagen trucks
businesses wants to create a global trucks operation.
A flotation could give Traton the resources to deepen its
relationship with U.S. truck maker Navistar International Corp
NAV.N , in which it owns a 16.85% stake.
Asked whether Volkswagen planned to buy out Navistar,
Chairman Hans Dieter Poetsch said: "Today's steps make many
things possible. Currently there are no concrete plans."
Traton Chief Executive Andreas Renschler said alliances with
Navistar, Hino and Sinotruck gave Traton economies of scale. "We
don't need any further participation at all, there's no need to
always buy companies," he said.
($1 = 0.8780 euros)
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(Reporting by Edward Taylor, Arno Schuetze, Hans Seidenstücker
and Hakan Ersen
Editing by Tassilo Hummel and Edmund Blair)
((Edward.Taylor@thomsonreuters.com; +49 69 7565 1187;))