JDE Peet’s BV surged in Amsterdam trading after the coffee giant raised 2.3 billion euros (US$2.56 billion) in just 10 days to become Europe’s biggest initial public offering (IPO) this year.
The stock climbed 13 percent to 35.43 euros by 10:10am in Amsterdam.
The company, carved out of the Reimann family’s investment firm, JAB Holding Co, priced its shares at 31.50 euros each, according to a statement yesterday, in the upper half of the range of 30 euros to 32.35 euros at which the offering was marketed.
That gave the company a market value of 15.6 billion euros.
JDE Peet’s on Thursday said that it would close the book early after just three days of taking orders in the IPO.
Investor demand exceeded the number of shares being sold by multiple times at the offer price, with strong interest from institutions globally, the company said.
By condensing the usual four-week listing process to just 10 days, JDE Peet’s minimized its exposure to potential market swings tied to the COVID-19 pandemic.
The pandemic has upended the traditional IPO process, with shorter subscription periods, more cornerstone investors and virtual meetings to pitch the offerings to investors. Cornerstone investors, including funds run by billionaire George Soros’s firm, are taking up one-third of JDE Peet’s offering.
JDE Peet’s is attractive in part because it should grow at a faster rate than the global economy and also pays a dividend, said Colin McLean, chief investment officer at SVM Asset Management, whose fund participated in the IPO and also bought shares once trading began.
“It’s a stable business making a steady move to premium, higher value-added coffee markets,” he said, describing the trading debut as a “reasonable start.”
The initial stock pop was to be expected given the high demand, he said, adding that his fund had received a lower-than-requested allocation.
The share sale saw strong demand from investors in the US, the UK and continental Europe, a person familiar with the transaction said.
Given the robust interest, keeping the order book open longer would have only exposed the transaction to downside risk, the person added.
The IPO brings to market a company that had sales of 6.9 billion euros last year and owns well-known supermarket brands including Douwe Egberts, Jacobs and Kenco, as well as US retailers Peet’s and Intelligentsia.
JAB created the company through a series of acquisitions, capped by the combination in December of Jacobs Douwe Egberts and Peet’s.
Coffee consumption has remained resilient during the pandemic, moving from offices and cafes into people’s homes, according to JDE Peet’s, which bills itself as the world’s largest pure-play coffee group.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Microsoft Corp yesterday said that it would create Thailand’s first data center region to boost cloud and artificial intelligence (AI) infrastructure, promising AI training to more than 100,000 people to develop tech. Bangkok is a key economic player in Southeast Asia, but it has lagged behind Indonesia and Singapore when it comes to the tech industry. Thailand has an “incredible opportunity to build a digital-first, AI-powered future,” Microsoft chairman and chief executive officer Satya Nadella said at an event in Bangkok. Data center regions are physical locations that store computing infrastructure, allowing secure and reliable access to cloud platforms. The global embrace of AI
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San