Port of Tallinn €147m Initial Public Offering, Estonia - East Capital Best IPO Award Winner 2018
2018
STJ Advisors advised on the successful privatisation, the first in the Baltic region in 18 years, by the Estonian government via Initial Public Offering of the Port of Tallinn which priced on 7th June 2018 in the top quartile of the price range. Port of Tallinn is the 4th largest port operator in Northern Europe with 10.6 million passengers in 2017. The Group has a diversified portfolio of infrastructure operations, including passenger /cruise ship harbours, cargo harbours and a domestic ferry service.
Port of Tallinn is the largest Estonian IPO and privatisation to price in over 12 years. The offering raised €147m including a €128m primary issuance, part of which will be used to pay an extraordinary dividend to the Government shareholder, resulting in a post-money market capitalisation of €447m. The offering was priced at €1.7, the top quartile of the range, and was oversubscribed multiple times. Only 4 of 29 European IPOs this year have priced above the midpoint of the range. The success of the offering contrasts to the very negative backdrop in the current European IPO market (in Q2 more than 50% of IPOs launched were pulled before pricing).
Over 100 investors from 22 countries placed orders in the book of demand and included high quality investors with sizeable orders including EBRD. Furthermore the offering received support from close to 14,000 retail investors (c.1% of the Estonian population) which accounted for 23% of the total demand and makes Port of Tallinn the listed Estonian Company with the largest number of retail investors. The high quality book ended up with a 75% split to long and pension funds, 21% to Retail and 4% to hedge funds.
STJ advised on all key aspects of the IPO including equity story preparation, selection and terms of engagement of all banks and advisers, listing venue, structure of the offering, marketing materials, price range setting, pricing tactics and allocations.
East Capital, one of the longest established and most respected Long Only Frontier and Emerging Markets investors gave Port of Tallinn the Best IPO Award for 2018; the citation noted: “Their IPO on the Tallinn Stock Exchange was the first privatisation in the Baltic region in almost two decades. The deal was skilfully executed, and more than 3 times oversubscribed by a wide investor base.”
The successful pricing of Port of Tallinn maintains STJ’s track record of a 100% completion rate against the EMEA market average of 70% over the last 5 years.
