JDE Peet’s shares surged after holding Europe’s biggest initial public offering this year, drawing investors counting on the Peet’s Coffee owner to weather the pandemic lockdowns and take on giants like Starbucks.
The coffee giant, carved out of the Reimann family’s investment firm JAB Holding, raised €2.3 billion (Dh9.4bn) in an IPO that took just 10 days, condensing what’s usually a four-week process and attracting investor orders that exceeded the number of shares offered by multiple times.
Coffee consumption has remained resilient during the pandemic, moving from offices and cafes into people’s homes, according to JDE Peet’s, which bills itself as the world’s largest pure-play coffee group. Takeovers of coffee companies and cafe chains surged in the last few years, driven in large part by JAB, which has acquired well-known brands such as Caribou Coffee and Keurig Green Mountain, growing to become a rival to Starbucks and Nestle.
JDE Peet’s climbed 13 per cent to €35.50 at 10:51 AM on Friday in its first day of trading in Amsterdam after earlier gaining as much as 17 per cent. The company priced its shares at €31.50 each, according to a statement Friday, in the upper half of the marketed range giving it a market value of €15.6bn.
The company, which had sales of €6.9bn last year, also owns supermarket brands including Douwe Egberts, Jacobs and Kenco as well as US retailers Peet’s and Intelligentsia, giving it access to home brewers.
JDE Peet’s is attractive in part because it should grow at a faster rate than the global economy and also pays a dividend, said Colin McLean, chief investment officer at SVM Asset Management, whose fund participated in the IPO and also bought shares once trading began.
“It’s a stable business making a steady move to premium, higher value-added coffee markets,” he said, describing the trading debut as a “reasonable start.” The initial stock pop was to be expected given the high demand, he said, adding that his fund had received a lower-than-requested allocation.
The pandemic has upended the traditional IPO process, with shorter subscription periods, more cornerstone investors and virtual meetings to pitch the offerings to investors. Cornerstone investors, including funds run by billionaire George Soros’s firm, are taking up a third of JDE Peet’s offering.
The share sale saw strong demand from investors in the US, UK and continental Europe, a person familiar with the transaction said. Given the robust interest, keeping the order book open longer would have only exposed the transaction to downside risk, the person said.
JDE Peet’s offering has raised hopes that the European IPO market, expected to be shut for the better part of the year amid the pandemic, could reopen earlier than initially expected. So far, listings in the region have been limited to a small group of companies either boosted by or experiencing little disruption from the lockdowns caused by the pandemic.
The IPO is the largest listing on a European exchange since brake systems maker Knorr-Bremse €3.9bn offering in October 2018, according to data compiled by Bloomberg. JDE Peet’s sold 22.2 million new shares, raising €700 million in gross proceeds.
Shareholders Mondelez International and Acorn Holdings, a company owned by JAB and other investors, sold existing shares for about €1.55bn.
Recent firms to have braved virus-related turmoil with an IPO have been rewarded by investors. Video-conferencing company Pexip Holdings shot up in its Oslo debut this month, trading 37 per cent up on the IPO price, while data management provider Exasol has risen 36 per cent since listing in Frankfurt on Monday. German drug-maker Pharma is also preparing to try its luck soon.
Islamophobia definition
A widely accepted definition was made by the All Party Parliamentary Group on British Muslims in 2019: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” It further defines it as “inciting hatred or violence against Muslims”.
Credit Score explained
What is a credit score?
In the UAE your credit score is a number generated by the Al Etihad Credit Bureau (AECB), which represents your credit worthiness – in other words, your risk of defaulting on any debt repayments. In this country, the number is between 300 and 900. A low score indicates a higher risk of default, while a high score indicates you are a lower risk.
Why is it important?
Financial institutions will use it to decide whether or not you are a credit risk. Those with better scores may also receive preferential interest rates or terms on products such as loans, credit cards and mortgages.
How is it calculated?
The AECB collects information on your payment behaviour from banks as well as utilitiy and telecoms providers.
How can I improve my score?
By paying your bills on time and not missing any repayments, particularly your loan, credit card and mortgage payments. It is also wise to limit the number of credit card and loan applications you make and to reduce your outstanding balances.
How do I know if my score is low or high?
By checking it. Visit one of AECB’s Customer Happiness Centres with an original and valid Emirates ID, passport copy and valid email address. Liv. customers can also access the score directly from the banking app.
How much does it cost?
A credit report costs Dh100 while a report with the score included costs Dh150. Those only wanting the credit score pay Dh60. VAT is payable on top.
'Ghostbusters: From Beyond'
Director: Jason Reitman
Starring: Paul Rudd, Carrie Coon, Finn Wolfhard, Mckenna Grace
Rating: 2/5
US Industrial Market figures, Q1 2017
Vacancy Rate 5.4%
Markets With Positive Absorption 85.7 per cent
New Supply 55 million sq ft
New Supply to Inventory 0.4 per cent
Under Construction 198.2 million sq ft
(Source: Colliers)
The specs
Engine: 6.2-litre supercharged V8
Power: 712hp at 6,100rpm
Torque: 881Nm at 4,800rpm
Transmission: 8-speed auto
Fuel consumption: 19.6 l/100km
Price: Dh380,000
On sale: now
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
So what is Spicy Chickenjoy?
Just as McDonald’s has the Big Mac, Jollibee has Spicy Chickenjoy – a piece of fried chicken that’s crispy and spicy on the outside and comes with a side of spaghetti, all covered in tomato sauce and topped with sausage slices and ground beef. It sounds like a recipe that a child would come up with, but perhaps that’s the point – a flavourbomb combination of cheap comfort foods. Chickenjoy is Jollibee’s best-selling product in every country in which it has a presence.
Fixtures
Wednesday
4.15pm: Japan v Spain (Group A)
5.30pm: UAE v Italy (Group A)
6.45pm: Russia v Mexico (Group B)
8pm: Iran v Egypt (Group B)
UAE currency: the story behind the money in your pockets
UAE currency: the story behind the money in your pockets
GIANT REVIEW
Starring: Amir El-Masry, Pierce Brosnan
Director: Athale
Rating: 4/5
The specs
Engine: 2.0-litre 4cyl turbo
Power: 261hp at 5,500rpm
Torque: 405Nm at 1,750-3,500rpm
Transmission: 9-speed auto
Fuel consumption: 6.9L/100km
On sale: Now
Price: From Dh117,059
BMW M5 specs
Engine: 4.4-litre twin-turbo V-8 petrol enging with additional electric motor
Power: 727hp
Torque: 1,000Nm
Transmission: 8-speed auto
Fuel consumption: 10.6L/100km
On sale: Now
Price: From Dh650,000
Killing of Qassem Suleimani
The specs: 2018 Mercedes-AMG C63 S Cabriolet
Price, base: Dh429,090
Engine 4.0-litre twin-turbo V8
Transmission Seven-speed automatic
Power 510hp @ 5,500rpm
Torque 700Nm @ 1,750rpm
Fuel economy, combined 9.2L / 100km