FOCUS: Investors seem unhappy about low price range of Softline’s SPO

By Yekaterina Yezhova

MOSCOW, Dec 4 (PRIME) -- Softline has been accepting bids for its secondary public offering from November 29 for a week but the low price range depressed the Russian IT company’s quotes that have lost 6.7% over the week, analysts said.

Softline fell after the company announced the offering price range of 140 to 149.84 rubles per share, which is below the market, investment company Finam analyst Alexei Kalachev said in a research note.

The company’s ordinary shares closed at 143 rubles on the Moscow Exchange on December 1, falling by 6.7% over the week and 12.9% since September 25, the first day they traded on the bourse.

“Since the very first day of trading of Softline’s shares on the Moscow Exchange, where they were placed in September via direct listing, which means without involving additional capital, our business has seen high interest, including from the professional market participants,” the IT company’s CEO Vladimir Lavrov said in a statement.

“Given the elevated market demand, we have decided it was necessary to carry out a secondary offering of Softline shares, which will provide higher liquidity for our stocks and a wider free-float in the structure of the shareholder capital. The changes will be an important step for Softline’s shares to join the base of some Moscow Exchange indexes. This will stimulate higher interest to our shares and attract new investors, for example, from the index investment funds.”

The company intends to invest the raised money in geographical expansion, enlargement of the portfolio of high-margin IT products of own make, including through mergers and acquisitions.

Cifra Broker said in a research note that Softline earlier approved its development strategy till 2030, which stipulates cementing the leading position as a supplier of IT solutions, M&A deals, and entering foreign markets.

Investment company IC RUSS-INVEST senior trader Roman Blinov said the reasons behind the SPO are trivial – a wish to raise money. “Personally, I am a bit confused by the fact that so little time has passed since the IPO,” he told PRIME.

Blinov said everything will depend on the market mood. “We will certainly see demand, but we will see later whether it will be above that during the IPO or not. I am not overexcited by this idea, which does not contradict the fact that the terms of the forthcoming SPO will appeal to the investors,” he said.

“Especially since the investor who participates in the offer will have the right to acquire 10 shares at a placement price per every 40 shares purchased under the deal six months after the SPO.”

Softline said that its fully-owned subsidiary, Softline Projects, will offer up to 25 million Softline shares, which account for about 8% of the total number of Softline’s shares after completion of the deal.

The offered shares are lent by Sofltine’s major shareholder Atalaya to Softline Projects, and additional shares are issued in favor of the subsidiary. “After the additional emission is sold, the loan from Atalaya will be covered with the additionally issued shares,” the company said in its statement.

Softline said that the final placement price will be set on the day following the last day of book building, which is December 7 “but it will not be above the closing price of trading in Softline shares on the last day of accepting bids for the offer.”

The company takes bids for the SPO from November 29 through Wednesday.

“The offer is available for Russian qualified and non-qualified investors-individuals as well as for Russian institutional investors. Bids for the SPO can be submitted via the leading Russian brokers,” Softline said.

(89.7619 rubles – U.S. $1)

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