Apollo halts Verallia sale plan to press ahead with IPO -sources

Vetropack Holding SA

23/07/2019 17:16

By Arno Schuetze, Pamela Barbaglia and Andrés González
    FRANKFURT/LONDON/MADRID, July 23 (Reuters) - U.S. investment
company Apollo  APO.N  has halted discussions over a sale of its
French glass bottle maker Verallia because it believes that
better returns could be achieved from a stock market listing,
sources close to the matter told Reuters.
    A Paris listing could take place as early as September and
value Verallia at about 4.5 billion euros ($5 billion) euros
including debt, the sources said.
    Apollo, which took control of Verallia in 2015, launched a
dual-track process this year to gauge interest in both an
outright sale and an initial public offering (IPO).
    The U.S. company has received tentative bids from European
investors Cinven and CVC Capital Partners as well as Canadian
pension fund PSP Investments, one of the sources said, speaking
on condition of anonymity.
    But Apollo has suspended discussions until September to
focus on an IPO, he said, with another source saying that
packaging businesses such as Portugal's BA Glass were among
potential bidders but were reluctant to buy the entire company.
    Apollo, Cinven, CVC and PSP declined to comment while BA
Glass representatives were not immediately available for
comment.
    For all the talk of an IPO, however, market conditions might
not be conducive in the autumn and Apollo could yet resurrect a
sale or a break-up of Verallia, the sources said.
    Another source noted that if financing conditions remained
strong, Apollo could eventually negotiate a satisfactory price
with one of the bidders.
    Barclays  BARC.L , which was initially focusing solely on
the sale process, has now started working as a global
coordinator on the mooted stock market listing alongside BNP
Paribas  BNPP.PA , Citi  C.N  and Deutsche Bank  DBKGn.DE , one
of the sources said.
    Another source said the banks working on the IPO are on the
lookout for investors willing to buy minority stakes.
    Reuters reported on April 9 that Apollo was gearing up to
list Verallia this year and the company subsequently confirmed
plans to go public on Euronext Paris.  urn:newsml:reuters.com:*:nFWN22C0OK urn:newsml:reuters.com:*:nL8N21R3EW
    Verallia, Saint-Gobain's former glass bottle business, makes
bottles and jars for Pernod Ricard  PERP.PA , champagne house
Dom Perignon and chocolate spread maker Nutella. 
    The company expects to post earnings before interest, tax,
depreciation and amortisation (EBITDA) of roughly 550 million
euros this year and is hoping to fetch a multiple of between 8
and 8.5 times its core earnings in an IPO, sources have said
previously.
    Rivals such as Vetropack  VET.S , Owens-Illinois  OI.N  or
Vidrala  VID.MC  trade in a wide range of multiples, from 2.3 to
9.6 times EBITDA. 

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Bottle maker Verallia set for possible 4 billion euros IPO -
sources     ID:nL8N21R3EW 
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 (Reporting by Arno Schuetze, Pamela Barbaglia and Andres
Gonzalez
Additional reporting by Abhinav Ramnarayan and Inti Landauro
Editing by David Goodman)
 ((pamela.barbaglia@thomsonreuters.com;  +442075427723; Reuters
Messaging: pamela.barbaglia.thomsonreuters.com@reuters.net))