Turkey’s Coke revives IPO

LONDON/ISTANBUL (Reuters) – The Turkish unit of Coca-Cola Co said yesterday it had appointed Credit Suisse First Boston to revive an initial public offering that it postponed twice last year. Confirming a Reuters report, Anadolu Efes, which owns 45.6 percent of Coca-Cola Icecek (CCI), said in a statement to the Istanbul Stock Exchange, «Coca-Cola Icecek has appointed and given authority to Credit Suisse First Boston as global coordinator to begin preliminary work on a restructuring process including a probable initial public offering.» The company has dropped Citigroup, who were Coca-Cola Icecek’s bankers last November when a flotation valuing the company at around $1 billion was pulled at the last minute due to insufficient demand. The IPO, which had been set to be one of Turkey’s largest in recent years, was previously postponed in June 2004. CCI had 59.3 percent of the local soft drinks market at the end of 2003. It had net sales in the first half of 2004 of $308 million and operating profit of $50 million. CSFB declined to comment on the flotation. «Since the IPO was canceled last year the value of Turkish assets has risen with the EU process and privatizations,» said HSBC analyst Omer Omerbas. «The market right now is rising, there is intense demand for privatizations, so it’s a profitable time for an IPO.» Barring a major upset, Turkey is to start talks on October 3 to join the European Union. Reforms backed by the IMF and the EU have boosted confidence in Turkey’s economy and privatizations worth $14 billion have been agreed so far this year. ‘Market looks good’ Cancellation of the flotation of Coca-Cola Icecek last November sparked sharp declines in the Istanbul shares of companies belonging to the Anadolu Group, which then held a total 40 percent stake in the Coca-Cola unit. Coca-Cola Co owned a further 40 percent of the company and the Ozgorkey family had the remaining 20 percent. In November, Coca-Cola Icecek had offered around a third of its capital, plus an over-allotment option. Turkish brokerage Is Yatirim were advisers with Citigroup in the company’s previous attempt to list. Part of the reason the IPO was canceled last year was due to lack of demand because of the high price, Omerbas said. «Of course, it is necessary to see the price which is announced,» he said. «But I don’t think the question of whether the market can bear the IPO or not will be asked this time.» Garanti Bank analyst Deniz Egemen agreed: «Anadolu Efes is in good condition as a company and the condition of the market looks good for an IPO. Now they have the experience of trying for an IPO before and they should get the price they aim for.» CCI has invested about $500 million in the last 10 years and employs 1,800 people directly and 20,000 indirectly. IPO volumes have been strong across Europe this year, with $27 billion raised in the year to date, up 21 percent from a year earlier, according to data provider Dealogic. Companies are listing as equity markets rise, investors become more willing to invest in new companies and hedge funds regain their appetite for risk after suffering two months of poor returns before the summer.

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