Biffa has today (17 October) triggered its initial public offering (IPO) on the London Stock Exchange at 180 pence per share.
The offer price equates to a market value of £450 million for the waste business, but has been cut from an initial signalling of 220-270 pence per share.
Biffa returns to the London Stock Exchange this week with an IPO of 180p per share
Biffa first confirmed the flotation last month, which at the time was described as the City’s largest since the UK’s decision to leave the EU in June.
It had expected to raise an estimated £270 million from its offer, which comprises new shares to be issued by the company and the expected sale of existing shares (see letsrecycle.com story).
Shares
The IPO comprises 118,001,417 new shares – representing 47.2% of Biffa’s share capital. Biffa can now expect to raise an estimated £262 million when it begins trading on the Stock Exchange on Thursday (20 October). Proceeds from the IPO will be used to reduce Biffa’s current debt facilities.
An option to issue additional 5.9 million shares – 5% of the total offer – has been granted by existing shareholders to Citigroup Global Markets Limited, which if implemented would raise £11 million in proceeds.
Assuming this option is not exercised, Biffa’s senior lenders Avenue Capital Credit, Angelo Gordon, and Brain Capital Credit and will hold 15.5%, 14.5% and 9.1% of the share capital following admission of trading.
Biffa’s directors will meanwhile hold 2.6% of the company’s issued share capital– not taking into account of any share awards at the start of trading.
Listings
The public offering, which is lower than expected, comes days after financial news sources speculated that Biffa could cancel its IPO in the wake of market volatility and uncertainty over Brexit.
Caution among investors has seen TI Fluid Systems, Pure Gym, OfficeFirst and First Utility suspend or pull IPO plans altogether since the summer.
The company is well placed to exploit structural changes in the UK waste market.
Ian Wakelin, chief executive
Biffa
However, Ian Wakelin, chief exuective of Biffa, has welcomed the company’s return to the London Stock Exchange as a “significant milestone” and an endorsement of its “business model, strategy, track record and prospects”.
He said: “The company is well placed to exploit structural changes in the UK waste market, leveraging its diversified and integrated operations right across the country. Biffa will continue its disciplined approach to capital allocation and to capturing further operational efficiencies by optimising its systems and processes.
“We welcome our new shareholders and look forward with confidence to the next stage in the development of Biffa as a public company.”
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Source: letsrecycle.com Waste Managment
