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UPDATE 1-Italian coffee maker to go ahead with market listing despite turbulence
July 18, 2014 / 4:41 PM / 3 years ago

UPDATE 1-Italian coffee maker to go ahead with market listing despite turbulence

(Adds asset manager comments, companies planning to list)

By Francesca Landini and Elisa Anzolin

MILAN, July 18 (Reuters) - Undeterred by the recent flop of two initial public offerings on the Milan bourse, coffee maker Massimo Zanetti Beverages Group (MZB) is sticking to plans to list a 30 percent stake on the market this year, its chairman told Reuters on Friday.

Italian drug maker Rottapharm and gaming group Sisal scrapped their IPOs last week due to poor demand amid market volatility, while state-owned ship maker Fincantieri had to reduce the size of its share sale.

But Massimo Zanetti, head and founder of the coffee company, said the withdrawal of the two share sales “did not change anything” for him.

“I have a clear plan in mind, we aim to list around 30 percent of the group in October,” Zanetti said in an interview.

The company, which sells global coffee brands Segafredo Zanetti and Chock full o‘Nuts, has hired Banca IMI and BNP Paribas for the operation, he said.

Zanetti expects MZB Group’s IPO to raise funds for acquisitions and help keep the family-owned group independent.

MZB Group, which manufactures 120,000 tonnes of coffee a year and makes more than 20 coffee brands worldwide, made more than 1 billion euros ($1.35 billion) in revenues last year.

“Around 90 percent of our sales are outside Italy, we are a global group and I am sure we will be successful,” Zanetti said, adding that the offering will target international investors.

Investment bankers and fund managers have blamed an overcrowded market, poor company presentations and pricey valuations for the failure of Rottapharm and Sisal’s planned flotations, saying investors had become more selective.

They also point to a 30-percent rise over the past year on the Milan bourse, which outperformed most of Europe’s markets even though the euro zone’s third largest economy is struggling to emerge from its worst recession in 70 years.

“The failure of the Rottapharm and Sisal IPOs was due to company-specific issues and not to a change in investor sentiment towards Italy,” said Manuela D‘Onofrio, head of global investments at Unicredit.

A fundraising glut by Italian names, including cash calls for almost 11 billion euros by a string of banks, also reduced available liquidity, said Alberto Chiandetti, a fund manager at U.S. global asset manager Fidelity.

Still, at least three other Italian companies - paper factory Fedrigoni, eco-leather producer Favini and retail high-street chain OVS - are planning to join MZB group and launch IPOs in the coming months, sources with knowledge of their plans said.

The global market for IPOs has boomed, with the amount raised by companies worldwide soaring 60 percent to $107.2 billion in the first half of 2014, compared with a year ago.

Investors have focused on Europe, rushing to cash in on the region’s nascent recovery and cheap money released by central banks.

In Italy alone, four companies have listed on the main Milan market in 2014 so far, raising a total of 2.4 billion euros in just six months, which makes 2014 likely to be the best year for market listing since 2007.

$1 = 0.7392 Euros Additional reporting by Maria Pia Quaglia; Editing by Sophie Walker

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