C&C to toast £540m float

IRISH drinks company C&C is coming to the London and Dublin stock markets with a share valuation of around e800m(£540m).

It is the second major offering from the booming Irish economy in less than two months.

Eircom, the fixed-line phone company, had a highly successful and similar-sized e800m flotation on both markets last month and more are said to be in the pipeline.

Private Irish investors have been pumping money into London, including the £750m takeover of the Savoy group and another £1.35bn of private money finding itself into the property market, mainly in the capital.

C&C, which was previously known as Cantrell & Cochrane, was forced to abandon its flotation almost two years ago when the London stock market crashed. Coincidentally, the Irish economy also went into reverse in the summer of 2002 with consumer confidence plunging.

Today, according to Maurice Pratt, chief executive of C&C, Irish drinkers are back with a vengeance and the economy is booming again.

He added: 'You never want to disappoint investors, and with the great benefit of hindsight is was good thing we didn't come to the market then. What it showed was how resilient our brands are in the bad times and how they can grow in the good times.'

Investment bank HSBC recently forecast that the Irish economy will grow by 5.5% this year and next, making it the strongest performer in the euro zone.

Pratt said: 'We are looking at underlying profits growth of 6.5% in the year which just ended and every sign of growth going forward.

'Even the ban on smoking in pubs has not hit. There has been 99.9% complinace with the ban, and although it's early days we have seen no signs of a fall in trade.'

C&C, which has a range of brands from Bulmers Cider to Frangelico liquer and Ballygowan water to Tayto crisps, was a leveraged buyout from Allied Domecq in January 1999.

Private equity backer BC Partners is reckoned to have turned an original e750m investment into something worth around e1.2bn today.

BC Partners will hold on to a 37.6% stake after the float and has undertaken not to sell for at least 180 days.

Management under Pratt will make e11m by selling shares during the flotation but will keep a stake of just under 5%.

Bankers Citigroup and Goldman Sachs share the float and announced a price range of e2.26 to e2.74 a share today, valuing the company at between e723m and e877m.

Two years ago the indicated price range before the float was pulled had been e2.60 to e3.60, although since then C&C has sold its Italian business for some e150m.

About 176m shares worth e440m will be offered for sale only to institutional shareholders.