April 20, 2018 / 5:55 AM / a year ago

UPDATE 2-Ceva plans May 4 flotation as bookbuild set wide

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By Brenna Hughes Neghaiwi, Oliver Hirt and Arno Schuetze

ZURICH, April 20 (Reuters) - Transport firm Ceva Logistics aims to launch on the Swiss stock exchange on May 4, setting a wide price spread for its bookbuilding amidst uncertain market conditions. Ceva Logistics, owned by private equity firm Apollo, aims to raise 1.2 billion Swiss francs ($1.23 billion) in an all-primary share offering and on Friday set a price range for its bookbuilding between 27.5 and 52.5 Swiss francs per share.

Together with a private placement giving CMA CGM Group a roughly 25 percent stake, the flotation would value the company’s equity at roughly 1.5 to 1.8 billion Swiss francs, Ceva said.

Turbulent markets have put the brakes on deals and listings, with several scrapped IPOs — including those of Gategroup and Swissport in Switzerland — costing bankers money in recent months.

Sources close to the deal pointed to rocky markets as the reason behind an unusually wide price spread, with 20 percent a more normal range.

“The wide range mirrors the wobbly markets,” a person familiar with the Ceva listing said. “It’s a buyers’ market. Investor feedback for Ceva was all over the place.”

Ceva’s chief financial officer, however, said that wasn’t necessarily the case and pointed to the firm’s high debt. The share listing would ultimately place the group’s market capitalisation within a 20 percent range, the firm said.

Ceva announced the flotation earlier this month, saying the proceeds would help deleverage its balance sheet.

“The existing Ceva shareholders are under big pressure to sell. Ceva needs the money for deleveraging,” the person said. “The wide range gives them the opportunity to price a tad higher if investor confidence comes back.”

French-based CMA CGM, one of the world’s largest container shipping firms, has highlighted non-maritime transport as an important growth area, saying on Friday the stake would help complement its existing businesses.

The group, controlled by the Saade family and based in the Mediterranean port city of Marseille, has benefited from a recovery in container shipping, supported by large-scale consolidation including its 2016 takeover of Singapore-based line APL. But it said last year it wanted to expand its services along the supply chain as a source of extra growth.

$1 = 0.9725 Swiss francs Additional reporting by Gus Trompiz and Sudip Kar-Gupta in Paris and John Revill in Zurich; Editing by Elaine Hardcastle

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