C&C chief 'delighted' at flotation

SHARES in C&C, the drinks and snack food group, were floated at the lower end of the company's indicative price range.

The shares floated at €2.26, the bottom of the price range, but C&C officials said they were pleased to get the stock market listing after a sharp dip in markets last week.

The price values C&C at €723 million and will raise €398m for existing shareholders, including e9m for the company's management.

C&C chief executive Maurice Pratt said yesterday that he was "delighted" with the flotation "particularly given the volatile market conditions experienced this week."

The company pulled a previous attempt to list on the Dublin and London stock exchanges two years ago because of poor market sentiment. There had been some speculation that this would scupper this attempt.

Mr Pratt added: "The strong calibre of the shareholder base reflects the understanding of the business dynamics and prospects of C&C. We look forward to starting life as a public company and to delivering value to our shareholders. C&C brands have leading positions in Ireland's cider, soft drinks and snacks markets, benefiting from our comprehensive distribution network." The company sold 176 million shares, 55% of the total, and said reaction from institutions was strong and the initial public offering was 10% oversubscribed.

BC Partnerss, the British private equity firm that funded the buyout of C&C from Allied Domecq in 1999, will retain a 36% stake in the firm.

The flotation will also net millions for Mr Pratt, chairman Tony O'Brien and other members of the management team who are selling part of their stake.

Based on the flotation price, the company will have a dividend yield of 5.5%.

A healthy dividend payment, even though it is carrying a large amount of debt, will entice some investors to buy the shares.

The company will be hoping for better luck than Eircom and CNG Travel, which have listed on the stock markets this year. They have yet to trade above their offer price. C&C owns some of Ireland's best known brands, including Bulmers ciders, Ballygowan spring water and Tayto crisps.

For the year to the end of February 2004, the company had sales of €782 million and profits of €149m.

Goodbody Stockbrokers said yesterday that C&C was a "solid company with strong market positions."

But it highlighted several challenges including the possible slowdown in its core beverage markets and a stretched balance sheet.

C&C shares slipped by around 1% when trading began but were unchanged at €2.26 at the end of the day.

Full dealing will begin next Wednesday.