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July 8, 2013 5:04 pm
Shares in Osram fell as much as 2.4 per cent on their stock market debut on Monday in the first German listing since Deutsche Annington was forced to pull its offering last week due to choppy markets.
The world’s second-largest lighting company, which is being spun off by engineering group Siemens, priced its offering at €24 a share, but fell to a low of €22.99 a share in early trading.
Osram last month had warned that its shares might come under “considerable selling pressure” as some funds that owned Siemens shares would have to sell Osram shares because it was not in Germany’s DAX index.
Siemens shareholders received one share in Osram for every 10 shares they owned.
But the fall also comes amid worries that the steadily improving IPO market could have taken a step backwards after the US Federal Reserve shook wider equity markets by announcing plans to scale back its $85bn-a-month bond-buying programme.
Last Wednesday Deutsche Annington, the 180,000-unit property portfolio owned by Terra Firma, abandoned its planned flotation after it struggled to fill the order book amid weak markets. It was the first large deal pulled in Europe this year.
It was a similar story in the US as construction materials supplier HD Supply was forced to cut the price of its IPO by almost a quarter to $18 a share earlier in the month, after announcing a range of $22-$25.
Emerging market issuance has also been hit, most obviously in the case of Votorantim Cimentos, Brazil’s largest cement producer, which last month suspended a R$10.3bn ($4.9bn) IPO.
This comes as IPO volumes were strong in the first half of the year, particularly in Europe where volumes tripled in the period compared with the same period last year, according to Dealogic. Global volumes were up by a fifth.
Bankers say, however, that the pipeline for new deals is still strong. They point out that while stocks on the benchmark Eurofirst 300 index fell 11 per cent in the month following the Fed news, equities have since rebounded 6 per cent.
Osram is in the midst of a restructuring, announcing last year that it would cut 4,700 jobs and close plants round the world, responding to what it said was “fundamental change” in its sector. Siemens spun off 80 per cent of the group.
The share placing at €24 gave the company a market value of about €2.5bn. The shares were down 0.8 per cent to €23.75 in late afternoon trading.
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