De Nora pays the price for Snam’s lightning-fast 5 per cent placement

(Il Sole 24 Ore Radiocor) - Industrie De Nora is seeing its share price fall on the stock market following the sale of a 5 per cent stake by Snam and is trading below the placement price due to an overhang risk on the share. On Monday, after the market closed, Snam launched an accelerated book-building 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 had already been covered: the placement was priced at €6.69 per share, for a total value of approximately €67 million, implying a discount of 9.5 per cent compared with De Nora’s closing price on Monday of €7.40.

According to Banca Akros (which has a ‘neutral’ rating on the share with a target price of €8.50), the rapid filling of the order book “is a sign of strong initial demand from institutional investors, likely supported by the 9.5 per cent discount on the previous closing price”. The placement price, they add, “is set to exert downward pressure on the share price”, 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), should 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 Monday’s announcement, De Nora has quantified the reduction in project costs resulting from the downsizing of the Gigafactory.