The rights issue is fully underwritten
by Barclays, HSBC and Investec, but with
largest shareholder Global City Holdings
agreeing to take up its full pro rata
entitlement to maintain its current 28%
shareholding. That will involve, among
OTHERûlNANCINGûARRANGEMENTS ûAûMARGINû
loan and a co-investment with a sovereign
wealth fund.
The base fee is 1.8%, with an incentive
fee of 0.15%, split 40% to Barclays, 40% to
HSBC and 20% to Investec.
Cineworld shares opened on Wednesday
morning at 550p, down around 2.4%.
AMERICAS
CANADA
SHERRITT RAISES US$115m TO CUT DEBTSHERRITT INTERNATIONAL, a TSX-listed nickel
and cobalt miner, raised C$115m (US$92m)
from an upsized stock sale.
)NûITSûlRSTûEQUITYûOFFERINGûINûAûDECADE û
Sherritt was able to increase the size of the
deal from US$100m at launch.
Sherritt priced 82.14m units at C$1.40 a
share, a 3.5% discount to last sale.
Each unit consisted of one common
share and one-half of a “cobalt-linked”
warrant exercisable at C$1.95 a share.
The ratio at which the warrants convert
into shares is set by the cobalt price, giving
investors leverage to upward movements
in the commodity’s value.
The net proceeds of the offering are
being used for debt reduction.
The company raised the funds by way of
an agency agreement with Paradigm
Capital, Eight Capital and National Bank
Financial, who acted as co-lead agents and
joint bookrunners on behalf of a syndicate
that also included TD Securities.
UNITED STATES
US IPO ACTIVITY HEATS UPThe US IPO market is staging one of the
busiest Januaries on record, but suffered a
setback on Friday with the dismal debut of
the largest deal so far this year - the
US$1.47bn IPO of Apollo-backed home
security provider ADT.
ADT raised as much as 30% less than
hoped and opened down 9.6%.
Investors took issue with the company’s
earnings and business model, but it was still
a setback for sponsor-backed IPOs in the
pipeline.
Apollo will make another foray into the
IPO market in the coming week when it
looks to price the US$184.5m IPO of
electronic gaming machine maker PLAYAGS,
while Blackstone is bringing the US$750m
IPO of auto parts maker GATES INDUSTRIAL.
)NûALL û*ANUARYûISûLIKELYûTOûlNISHûWITHûASû
many as 15 IPO pricings raising more than
US$7bn, the busiest start to the year in
recent memory based on the latter measure.
Though ADT disappointed, NINE ENERGY
SERVICES and AMERICOLD REALTY, the past
week’s two other IPOs, achieved top-end
pricing and traded up on debut.
The coming week will be the busiest of
the year to date, bringing eight IPOs led by
the US$1.9bn NYSE IPO of Brazilian
payments company PAGSEGURO DIGITAL. There
AREûALSOûlVEûBIOTECHû)0/SûSCHEDULEDûTOûPRICEû
in what is seasonally a busy period for the
sector.
More launches could be forthcoming,
PARTICULARLYûFROMûTHEûOILlELDûSERVICESûSECTOR û
BUTûWITHûTHEûABSENCEûOFûANYûHIGH
PROlLEû
tech companies, the pipeline is relatively
bereft of excitement.
On the follow-on front, the past week was
dominated by several large, upsized primary
raisings by biotechs, the largest being
BEIGENE’s US$750m offering and AGIOS
PHARMACEUTICALS’ US$475m raising.
Earnings could continue to keep a lid on
follow-on issuance outside the busy biotech
sector.
The past week saw several companies
DISCLOSEûTHATûTHEYûHADûlLEDûCONlDENTIALLYû
Sponsor-backed software company CERIDIAN
HCMûANDû"ROOKlELD
BACKEDûGRAFTECH
INTERNATIONALûBOTHûANNOUNCEDûTHEYûHADûlLEDû
with the SEC for IPOs that could price later
this year.KEANE GROUP, NINE ENERGY
RIDE OIL CYCLEFor investors looking at KEANE GROUP, a
Cerberus-backed oil fracker that went
public a year ago, the company’s recentDECISIONûTOûEXPANDûITSûDRILLINGûmEETûPOINTEDû
TOûCONlDENCEûINûTHEûSUSTAINABILITYûOFûTHEû
current drilling cycle.
!ûCENTRALûDILEMMAûFORûOILlELDûSERVICESû
companies and their investment premise
is whether to reinvest or to retain/
DISTRIBUTEûCASHûmOWS
The purchase of three new fracking rigs,
two of which will go into service in the
second quarter and the other in the third
quarter, marked a reversal of comments by
Keane management late last year that rig
ECONOMICSûWEREûINSUFlCIENTûTOûJUSTIFYû
expansion.
Since then, WTI oil has continued its
march to US$63.97, from the mid-50s at
the time of the decision to defer
expansion.
Keane reinforced a more bullish outlook
by facilitating a twice-upsized, all-
secondary sale of 13.3m shares.
4HEûDEALûWASûlRSTûmAGGEDûATûMûSHARES û
before jumping to 11m shares on the
4UESDAY
MORNINGûLAUNCHûANDûlNISHINGûATû
13.3m shares priced on Wednesday
evening at US$18.25, a 1.4% discount to the
US$18.51 last sale.
Citigroup and JP Morgan were the actives
among the six bookrunners on the
offering, which saw Cerberus and other
insiders reduce their combined stake from
64.6% to 52.9%, leaving a still sizable
overhang of 59m shares.
“It is a better oil environment,” said one
banker involved in the underwriting.
“There is a view among some [investors]
that this company is cheap.”
Keane broke offer on Thursday to close
at US$17.96.
Keane expects to generate adjusted
Ebitda of US$90m–$95m on revenue of
US$498m–$500m, versus US$71.6m and
US$477.3m, respectively, in Q3, based on
preliminary estimates.
NINE ENERGY SERVICE, a provider of well
completion services, achieved top-end
pricing on its US$161m IPO on the tail-
winds of similar industry trends.
JP Morgan, Goldman Sachs and Wells Fargo
placed 7m shares at US$23, against a
US$20-$23 range that was intentionally
wide to accommodate the cyclical nature
of the industry.
Nine Energy traded early on Friday at
US$23.99 on its NYSE debut.
The participation of energy-focused,
LONG
ONLYûINVESTORSûONûRECENTûOILlELDû
services deals is notable. Roadshow
meetings in Boston on Wednesday and the
West Coast earlier in the week saw strong
attendance from the long-only
community, a banker on the Nine Energy
IPO told IFR.
Like Keane, Nine Energy is pumping out
CASHûmOWSû)NûTHEûlRSTûNINEûMONTHSûOFûTHEûUS EQUITIES
BOOKRUNNERS: 1/1/2018 TO DATE
Managing No of Total Share
bank or group issues US$(m) (%)
1 Morgan Stanley 9 1,521.91 13.6
2 RBC 4 1,339.95 12.0
3 Barclays 6 1,335.74 11.9
4 Goldman Sachs 9 1,258.70 11.3
5 BAML 8 1,162.01 10.4
6 JP Morgan 11 1,155.38 10.3
7 Citigroup 8 1,075.74 9.6
8 Credit Suisse 3 462.10 4.1
9 Wells Fargo 5 396.59 3.5
10 Jefferies 4 306.92 2.7
Total 29 11,188.31
Including all domestic and international deals and rights issues
Source: Thomson Reuters SDC code: C3r