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French fashion group SMCP to set per share IPO price at 20-25 euros

SMCP, owner of the three strong Paris-designed brands: Sandro, Maje and Claudie Pierlot, has launched its initial public offering (IPO) for the admission to trading of its shares on the regulated market of Euronext Paris (Compartment A). The company said, the IPO of SMCP will offer per share price of between 20 to 25 euros, giving the company an enterprise value of up to 2.2 billion euros (2.5 billion dollars).

SMCP announces IPO plans

The company added that the IPO offers a share capital increase in cash, resulting in gross proceeds of about 127 million euros (149 million dollars), or net proceeds of approximately 121 million euros (142 million dollars). The offer also consists of sale of existing shares by the selling shareholders, resulting in gross proceeds of a maximum of around 390 million euros (459 million dollars) excluding exercise of the overallotment option, of up to approximately 468 million euros (550 million dollars) if the over-allotment option are exercised in full; or based on the high end of the indicative offering price range approximately 479 million euros (563 million dollars) excluding exercise of the over-allotment option, of up to approximately 569 million euros (669 million dollars) if the over-allotment option are exercised in full.

SMCP said, trading of shares on the regulated market of Euronext Paris, in the form of “promesses d'actions”, is expected to begin on October 20, 2017. Settlement and delivery is expected to occur on October 23, 2017. The main objective of SMCP's IPO is to pursue its development and growth strategy and to reduce its indebtedness, in order to increase its financial flexibility. The company added that IPO will also provide liquidity to the selling shareholders.

SMCP to use IPO to reduce debt

The net proceeds of the IPO will be used by SMCP to reduce the financing costs of the group, by repaying a portion of the 2023 bonds, at the principal amount of 111,3 million euros (1,310 million dollars), plus a whole premium and interest due at the repayment date of approximately 9.7 million euros (11.4 million dollars). The Group will also repay the 2022 bonds in full for a principal amount of 100 million euros (117 million dollars) plus early repayment fees and accrued interest amounting to around 2.4 million euros (2.8 million dollars).

At the end of June 2017, SMCP brands were present in more than 1200 points of sales in 36 countries. Evelyne Chetrite and Judith Milgrom founded Sandro and Maje in Paris, in 1984 and 1998 respectively and continue to provide creative direction for the brands. Claudie Pierlot was founded in 1984 by Madame Claudie Pierlot, and was acquired by SMCP in 2009.

Financial advisors involved in SMCP’s flotation include JP Morgan, Bank of America Merrill Lynch, KKR Capital Markets, BNP Paribas, HSBC, Societe Generale, Industrial & Commercial Bank of China (ICBC) and Mizuho International.

Picture:SMCP website