[ad_1]
(Sept 26): US beauty and fragrance company Coty Inc launched an offering of 33 million shares as part of a plan to list on Euronext Paris, boosting the French bourse’s appeal as a global hub for luxury stocks.
The stock offering would be valued at about US$389 million (RM1.82 billion) based on Coty’s Monday closing price in New York. Share offerings are typically priced at a discount to market price to entice would-be buyers. Coty has also applied to list its Class A common stock on the professional segment of Euronext, it said in a statement.
Investors will have the option to purchase Coty’s Paris-listed stock in euros or the New York Stock Exchange-listed stock in dollars. Coty’s US shares dropped 3.3% in premarket trading on Tuesday.
Bloomberg News reported last week that Coty was preparing to reveal details of the proposed Paris listing. BNP Paribas SA, Credit Agricole SA, Citigroup Inc and Banco Santander SA are joint global coordinators of the offering, according to the statement.
Coty plans to hold a call with prospective investors on Tuesday at 9.30am New York time and price the offering before the US market opens Thursday (Sept 28), according to terms for the deal obtained by Bloomberg.
The company, which has a market value of about US$10.1 billion, plans to primarily use the proceeds to retire debt, according to the statement. The funds could also go towards general corporate purposes including strategic investments in its business, working capital and capital expenditures.
Most of the world’s biggest luxury goods companies — LVMH, L’Oreal SA, Hermes International and Kering — are traded on Euronext Paris. That means Europe has plenty of analysts and investors with an in-depth knowledge of the industry, its brands and cycles.
‘Liquidity pool’
Coty’s decision to list in Paris rests not only on “a community of analysts and comparables” but also Euronext NV’s “liquidity pool and an extremely deep order book,” Stephane Boujnah, chief executive officer of the exchange operator said in an interview.
“If we had stuck to small, fragmented stock exchanges, if we did not have a single order book, we would not have this movement,” he said, pointing to daily average trading volumes of €10 billion (RM49.9 billion) and €6 trillion of market value across Euronext exchanges.
Coty has historic ties to France, having been founded in 1904 in Paris. Coty’s offering is a rare win for Europe at time when the region’s homegrown companies are turning to the US in search of higher valuations. The cosmetics company said in May it was mulling a listing in Paris — “the historic home of beauty” — to tap a fresh pool of capital.
Coty in September raised its sales outlook for the year, citing robust demand for higher-end fragrances like the recently launched “Burberry Goddess”. Its brands include Covergirl, Kylie Cosmetics and Gucci and Hugo Boss fragrances.
The company said in its statement on Monday it plans to manage its outstanding share count by settling one or more outstanding total return swaps over the next six months, in an amount of up to 27 million shares.
Coty ended its most recent fiscal year with around US$4.4 billion in debt, which was down from nearly US$9 billion of debt at the end of fiscal 2020, according to Fitch Ratings. The beauty company said this month that it was on track to cut debt and meet its leverage ratio targets.
[ad_2]
Source link