Stock market: De Nora falls (-11%) following Snam’s flash sale of a 5 per cent stake
Analysts see a risk of a share price overhang; the share is trading below its sell price
(Il Sole 24 Ore Radiocor) - Industrie De Nora is feeling the impact on the stock market of Snam’s sale of a 5 per cent stake, falling 11.3 per cent to 6.56 euros – below the placement price – due to an overhang risk on the share. Snam also saw its share price fall, losing 0.85% to €5.61.
Yesterday, after the market closed, Snam launched an accelerated bookbuilding process for the sale of approximately 10 million Industrie De Nora shares, representing around 5 per cent of the company’s share capital. Thirty minutes after the launch, the bookrunner announced that the book was already fully subscribed: the placement was priced at €6.69 per share, for a total value of approximately €67 million, representing a discount of 9.5 per cent compared with De Nora’s closing price yesterday of €7.40. According to Banca Akros (which has a ‘neutral’ rating on the share with a target price of €8.50), the rapid covering of the order book ‘signals strong initial demand from institutional investors, likely supported by the 9.5% discount on the previous closing price’. The placement price, they add, “is set to exert downward pressure on the share price today”, as is indeed happening. Following the sale, Snam, through Asset Company 10 srl, holds approximately 16.6 per cent of the company’s share capital. According to Akros analysts, Snam’s remaining stake “represents a potential overhang, which could weigh on the share price once the 90-day lock-up period expires”. From Snam’s perspective, the transaction is consistent with the asset rotation programme outlined in Snam’s business plan, “which allows,” says Intermonte, “capital to be reallocated towards activities that further strengthen the gas infrastructure platform and support its integrated energy strategy”. The sale price, the analysts note (who have an ‘outperform’ rating on Snam with a target price of €6.90), is expected to be broadly in line with the book value (around €7 per share).
It is also worth noting that De Nora has announced that Mimit has revised the total amount of public funding granted for the development of the Italian Gigafactory project, bringing it to 50.3 million euros, covering 100 per cent of the project’s eligible costs. According to Banca Akros, this news is “already reflected in the company’s current guidance”. The funding relates to product development and testing activities. With yesterday’s announcement, De Nora has quantified the reduction in project costs resulting from the downsizing of the Gigafactory.
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