As it launches on Amsterdam’s Euronext stock market, coffee giant JDE Peet’s has not only decided to go through with its slated IPO but has pulled forward the date for the launch from 3 June to 29 May, after a particularly strong response from investors.
JDE Peet’s €2.25bn IPO makes waves across global market
The order book for the IPO was covered within hours of the market opening on 26 May, filling orders of around €2.25bn. The stock will be offered at around €30-30.25 per share and there will be 82.1m of new and existing shares on offer. The company has therefore been valued at around €16bn.
In late March, analysts believed that the European market for IPOs could be brought to a halt until late 2020. The volatility of both the European and Global market has meant there is a reluctance for investors to hand over their money. Companies, especially retail, also would have been expected to wait until the virus has eased so that earnings are highlighted in the best way possible, so that valuations are matched.
Traditional IPO processes have been thrown out of the window during the pandemic, with face-to-face contact and meetings around the globe brought to a standstill.
The fact that JDE Peet’s are willing to not only launch its IPO but bring it forward is testament to the confidence in its public offering.
IPO postponements and cancellations have been rife
The effects of COVID-19 on the economy has so far been colossal and the market will long see a lasting impact. IPOs across several industries slated for this year have been postponed or cancelled as a result of the pandemic. A major energy sector IPO worth $20bn has been delayed until the end of 2020 as uncertainties remain not just with financing but the price of oil, which dropped significantly as the virus took its hold on the globe.
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JDE Peets’ IPO will be larger than the expected €2bn revenue from all of the other 24 listings for 2020, and should give the IPO market a huge push forward in returning to business as usual, despite worldwide financial uncertainty.
The intention for the company’s IPO was initially announced when the merger between Jacobs Douwe Egberts and Peet’s Coffee happened in December 2019. The company’s joint tea and coffee brand portfolio puts it as the world’s second biggest coffee maker with revenues at the time of the merger of around €7bn. It will now will push forward confidently in the space with its latest €16bn valuation.