October 18, 2018 / 11:23 AM / 10 months ago

Schibsted's Norway investors fear losing out if ad unit listed abroad

* Norwegian investors welcome planned IPO of fast-growing unit

* But some worry over possible foreign listing

By Camilla Knudsen

OSLO, Oct 18 (Reuters) - A foreign listing of media group Schibsted’s international classified ads business would risk barring some Norwegian asset managers from investing in the fast-growing unit, two fund managers who are also Schibsted shareholders told Reuters.

Schibsted, owner of newspapers in the Nordics as well as online ad sites in 22 countries, including France, Spain and Brazil, announced in September it would split, with a separate listing of its non-Nordic MPI division.

The initial public offering, expected in the second quarter of 2019, has widespread investor support, but the company has not yet decided where the listing should take place.

Storebrand Asset Management and public pension fund Folketrygdfondet, with combined Schibsted ownership of nearly 10 percent, strongly favour the split, but have mandates limiting foreign investments.

“We are worried about a potential listing abroad,” Alf Inge Gjerde, senior portfolio manager at Storebrand, said of MPI.

“It might not change much for international investors, but it would probably mean that Norwegian institutional investors have to sell out and I doubt global investors would make up for that,” said Gjerde, who manages a 2.5 percent Schibsted stake.

Folketrygdfondet, Schibsted’s second-largest shareholder with a 7.2 percent stake, also risks being barred from holding the stock as its mandate places 85 percent of assets in Norway and 15 percent in other Nordic countries.

Schibsted officials were not immediately available for comment.

“For us, who mainly invest on the Oslo Stock Exchange, it will be positive if the company continues its listings here,” Folketrygdfondet’s Chief Executive Kjetil Houg told Reuters.

“We think the split is very exciting and that it will make the value more visible,” he said of Schibsted, which has a market capitalisation of $8.2 billion.

While the business to be spun off generates a quarter of group revenues and employs one third of the staff, its greater growth potential means it could represent 60 percent of the market value, according to brokerage Pareto Securities.

MPI is expected to grow organically and via acquisition, and will no longer be restrained by limitations set by the Tinius Trust, which controls 25.6 percent of votes in Schibsted via dual-class shares designed to protect the independence of the firm and its traditional newspapers.

“We think the market appreciates a simpler structure and the new company will probably attract new investors who are focused on growth. The new company could more easily participate in consolidation in an exciting industry,” DNB Asset Management portfolio manager Jarle Sjo said.

“Another positive effect of the split is that MPI will be more open to potential buyers,” Storebrand’s Gjerde said, adding that “it increases the likelihood that the company will be bought some day”. (Editing by Terje Solsvik and Emelia Sithole-Matarise)

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