Although it is monitoring the sale of glass bottle maker Verallia, Ardagh has said that this will have no effect on the timing of its planned equity listing. However, numerous investors are worried considering the company’s history of delaying its listing, which it has announced, and then delayed several times.
Ardagh has confirmed that it is monitoring the sale of glass bottle maker Verallia, but added that this would not throw off the timing of its planned equity listing.
The glass bottle and metal can maker bought Verallia North America (VNA) earlier this year, and the company’s owner Saint Gobain has now announced it is looking to sell the business.
Any acquisition would run up against Ardagh’s plans to go public in the second half of 2015.
“Ardagh will follow the Verallia process with some interest but it will not allow that process to disturb its IPO timeline,” a spokesperson for the company said last week.
A public listing would be the culmination of years of debt-fuelled acquisitions at Ardagh, having raised billions of dollars of high-yield bonds to finance a slew of M&A deals over the past decade.
On an investor call in May, Ardagh’s chairman Paul Coulson said the company was not looking to make further acquisitions, but with the caveat that it would look at Verallia if it came on the market, as it “represents the final piece of consolidation within the glass industry.”
While Ardagh has reassured investors that it will not allow a Verallia deal to disrupt an IPO, many bondholders are nervous given the company’s history of delaying its listing.
The company burnt through 8.7 million in “aborted IPO costs” in 2010, according to its accounts, and since then it has announced, and then delayed an IPO several times.
After Ardagh acquired Anchor Glass in 2012, it indicated to investors that it was now focused on its listing plans. Mere months later, however, it raised a nearly USD 1.6 billion-equivalent debt package to buy Verallia North America.
The deal languished in regulatory limbo for over a year, forcing Ardagh to redo the debt financing after making painful concessions to the US Federal Trade Commission.
Ardagh’s deeply subordinated payment-in-kind bonds dropped early last week, as concerns grew that a potential bid for Verallia could derail the IPO.
The USD 1.05 billion-equivalent PIK bond was priced in early June, a week after Ardagh’s announcement of renewed IPO plans. The deal was structured around the IPO, giving Ardagh the option to repay half of the bonds at 102 using proceeds from a listing until the end of 2015.