Casino shares slide as Cnova IPO pricing disappoints
By Dominique Vidalon
PARIS (Reuters) - Shares in Casino fell 5 percent on Thursday after the French retailer priced the initial public offering of its e-commerce business Cnova on the U.S. market at $7 per share, well below a $12.50-$14.0 target range.
The move, which sources blamed on poor market conditions, follows a lacklustre stock market debut by Europe's largest online fashion retailer Zalando in Frankfurt and a disappointing trading update from online giant Amazom.com last month.
"Investors' disappointment is bound to weigh on the shares," CM-CIC analyst Christian Devisme said in a note.
A source close to the matter said Casino had favoured going ahead with the operation despite poor market conditions in order to get a foot on the U.S. market and stressed the size of the deal was rather small, which also limited risk.
The IPO price valued Cnova at 2.3 billion euros, well below the 4.1 billion-4.5 billion valuation of the IPO range.
By 0919 GMT Casino shares were down 5.16 percent, underperforming their European sector, which was down 0.8 percent
The company said in a statement that it expected gross proceeds of $188 million from the sale of 26,800,000 ordinary shares on the New York-based NASDAQ later in the day, representing up to 7 percent of Cnova's capital.
"For Casino, this IPO is a good opportunity and represents a long-term investment," a Casino spokeswoman told Reuters. Continuación...