EASYJET began trading its IPO shares on the London Stock Exchange yesterday, ahead of its full listing on November 22 – and just two weeks after the tycoon Stelios Hadji-Ioannou abandoned plans to list his first company on the Cyprus Stock Exchange (CSE).
Hadji-Ioannou, one of the richest men in Britain, has long since been a source of pride to Cyprus, his homeland. But the relationship turned sour at the beginning of November, when he accused the CSE and the Central Bank of incompetence in mishandling the planned listing of his shipping company, Stelmar Maritime Holdings.
He withdrew his application and announced his decision to find a more professional and welcoming stock exchange elsewhere.
But yesterday all went smoothly on the LSE as easyJet’s Initial Public Offering of 63 million new ordinary shares began trading at £3.10, valuing the company at some £777 million.
The share price rose to £3.42 during the morning’s session, hauling the company’s value up to £860 million.
Analysts expect the IPO to be seven to 10 times over-subscribed in the run- up to unconditional trading, which begins at 8am on November 22.
EasyJet will trade under the ticker symbol EZJ.L. “We are delighted by the high level of interest and support that institutional shareholders have shown in easyJet,” Hadji-Ioannou said yesterday. “The IPO is a significant milestone for easyJet and will allow us to maximize our growth potential by helping fund our planned new Boeing 737-700 purchases.”
“We look forward to our future as a listed company and to continuing to enhance shareholder value by executing our proven skills in the low fare airline market,” he added.
Hadji-Ioannou’s personal wealth is likely to receive a considerable boost from the LSE. He owns 50 per cent of the company, granting him a paper fortune of £280 million.
The cost of the LSE offering is only 25 per cent, or about £195 million of easyJet’s total value.
Hadji-Ioannou is wary of repeating the lastminute.com experience, of mass selling after flotation. Therefore no shares will be offered publicly before trading begins.
Most of easyJet’s 1,400 staff brought shares before the IPO flotation. The majority are committed to a one year lock-in period, intended to put a cap on immediate cash windfalls.
EasyJet has said it does not intend to pay any dividends immediately.
Investment banks Credit Suisse First Boston and UBS Warburg acted as Joint Bookrunners for the listing. Merrill Lynch International and Schroder Salomon Smith Barney were Co-Lead Managers of the placing.
