Volvo Cars will press ahead with an IPO later this year after indications from investors that it will hit the $30bn valuation sought by Chinese parent group Geely, according to people familiar with the situation.
The company’s primary listing with be in Stockholm, with plans for a second listing in an Asian centre, most likely Hong Kong, at a later date, according to one person close to the company.
“Initial feedback from global investors is in line with Volvo’s valuation expectations,” one person familiar with the discussions said.
It is understood banks have not yet been instructed to begin the formal IPO process, but that Volvo aims to list by the end of the year.
FT analysis suggests that a flotation of 15 per cent of the company in Sweden would raise $4.5bn, and make the IPO the largest listing on the Swedish stock exchange since telecoms group Telia floated in 2000.
An IPO of part of Volvo will see Geely realise huge value from the Swedish carmaker it bought from Ford in 2010 for $1.8bn.
Geely had previously indicated it would not push ahead with an IPO unless it could guarantee a valuation of $30bn for the group, the FT reported in May.
The sum, which many analysts had dismissed as unrealistic, would value the Swedish carmaker at a higher multiple compared to its profits than either BMW or Mercedes owner Daimler.
Volvo last year sold 570,000 cars, with a profit margin of 6.4 per cent. It aims to close to 2-3 per cent gap with premium rivals through an ambitious mid-term plan.
Its strategy is to double sales by the middle of the next decade, as well as raising its profitability by 50 per cent.
By around 2025 half of its cars will be fully electric, while the group has already pledged that all new vehicles will run on either hybrid or full electric power.
Under Volvo’s plan, half of new sales by 2025 will be through its subscription service, which the carmaker believes is the future way that consumers choose to access vehicles.
A third of its cars by the middle of the next decade will also contain fully autonomous technology, either being sold to ride hailing operators, or directly to consumers.
Volvo entered a deal last year to sell up to 24,000 cars to Uber for use in its self-driving network in the future.
The plan is key to raising the car maker’s potential valuation in the future.
Because it is owned by China’s Geely, Volvo also enjoys access to the world’s largest and most profitable car market without the need of a joint venture with a local partner.
It also has a stake in Lynk&Co, a new electric brand in the Geely stable aimed at younger consumers and sold through a subscription service.
Volvo also owns Polestar, a spin-out performance brand focusing on electric and hybrid cars, and has a 50 per cent stake in self-driving technology company Zenuity and a joint venture with autonomous group Autoliv to develop driverless cars.
Gapping down
In reaction to disappointing earnings/guidance:
- JCP -25.7%, SPTN -18.5%, NTAP -4%, JD -2.7%, GFI -2.6%, DDS -0.6%
Other news:
- IIN -10.1% (prices underwritten public offering of 1.5 mln shares of its common stock at a public offering price of $55.00 per share)
- GNL -6.8% (announces offering of 4.0 mln shares of common stock)
- ORC -4.1% (declared August monthly dividend of $0.08/share, prior month $0.09/share)
- PRO -3% (prices follow-on public offering of 3.8 mln shares of its common stock at a price to the public of $34.00 per share)
- BBY -0.9% (to acquire GreatCall for $800 mln in cash)
- ILMN -0.6% ( to offer approx. $650 mln aggregate principal amount of convertible senior notes due 2023)
Analyst comments:
- NANO -1.7% (downgraded to Neutral from Buy at DA Davidson)
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Gapping up
In reaction to strong earnings/guidance:
- WMT +10.5%, BGG +9.2%, LFVN +7.6%, WUBA +7.5%, CSCO +6.7%
Other news:
- SBBP +10.9% (terminates public offering of ordinary shares)
- SYMC +6.7% (Starboard confirms 5.8% active stake, delivered a letter to the Issuer nominating a slate of five director candidates in early July)
- SAIL +2.3% (upsized underwritten public offering of 13.75 mln shares of its common stock by selling stockholders at $28.25 per share)
- MOV +1.8% (to acquire MVMT Watches for initial payment of approx. $100 mln)
- ELF +1.2% (ticking higher after the CEO disclosed the purchase of ~66K shares)
- AMAT +1.1% (ahead of earnings after the close)
- M +1.1% (after closing 16% lower following earnings)
- ADUS +0.8% (prices underwritten public offering of 2.1 mln shares of common stock at the public offering price of $59.00 per share)
- TEVA +0.6% (Teva Pharma and Regeneron (REGN) announce 'positive' topline results from a Phase 3 study of fasinumab in patients with chronic pain from osteoarthritis (OA) of the knee or hip)
Analyst comments:
- AVLR +6.7% (upgraded to Buy from Neutral at Goldman)
- CGC +3.4% (upgraded to Speculative Buy from Hold at Canaccord Genuity)
- BA +2.3% (upgraded to Buy from Neutral at UBS)
- FTI +1.7% (upgraded to Buy from Hold at Jefferies)
- LULU +1.5% (upgraded to Buy from Hold at Argus)
- KMB +0.5% (upgraded to Neutral from Underweight at JP Morgan)
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Early premarket gappersGapping up:
- BGG +9.2%, SBBP +8.9%, LFVN +7.6%, CSCO +6.7%, SYMC +6.2%, WUBA +5.8%, M +2.3%, MOV +1.8%, ELF +1.2%, AMAT +1%, SAIL +0.6%, ADUS +0.6%
Gapping down:
- SPTN -15.5%, NTAP -6.6%, GNL -6.5%, IIN -5.5%, JD -4.6%, ORC -4.1%, PRO -2.3%, ILMN -0.6%
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And Mr. Avihai Stolero ("the Offer"), to purchase all of the Company's shares on the way
, The company
Of a three-way reverse merger at a company value (including fully diluted) of NIS 430 million
Wishes to announce that the Company's Board of Directors decided to reject the offer, inter alia, in light of the above
The amount of consideration offered in the framework of the offer.
Symantec: Starboard confirms 5.8% active stake, delivered a letter to the Issuer nominating a slate of five director candidates in early July (18.55)
The Reporting Persons believe that the Nominees have the qualifications, experience and skill sets necessary to serve as directors of the Issuer, as evidenced by their bios below. The Reporting Persons hope to continue to engage in constructive dialogue with the Issuer's management team and the Board regarding opportunities to unlock value at the Issuer, including changes to the composition of the Board.
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