September 18, 2018 / 11:22 AM / 2 months ago

UPDATE 1-Schibsted to spin off international online classifieds in IPO

* Eyes H1 2019 IPO for fast-growing non-Nordic business

* Intends to remain significant shareholder over time

* A major positive move, brokerage says

* Shares surge more than 10 percent (Adds analyst comment, background)

By Camilla Knudsen

OSLO, Sept 18 (Reuters) - Norwegian media group Schibsted said on Tuesday it will spin off its fast-growing international online classified ads operations in an initial public offering, sending its shares surging more than 10 percent.

Schibsted Chief Executive Rolv Erik Ryssdal will become CEO of the new company, which is likely to list in the first half of next year, the group said.

Kristin Skogen Lund, head of Norwegian business lobby the Confederation of Norwegian Enterprise and a former Schibsted executive, will take over as CEO of the rest of Schibsted, which will keep its newspapers and Nordic online ad business.

Originally a newspaper group, Schibsted in the 1990s created websites carrying ads for buying and selling items online, taking a dominant position in its native Norway and later expanding to more than 20 countries around the world.

Its non-Nordic online classifieds business generated revenues of 4.8 billion Norwegian crowns ($587 million) last year, jumping 22 percent from the previous year, according to the group’s annual report.

The Schibsted group as a whole saw revenues rise just 7 percent last year to 16.9 billion crowns.

While the business to be spun off only generates around a quarter of group revenues and employs a third of its staff, its greater growth potential means it is likely to represent 60 percent of the group’s market value, brokerage Pareto Securities said.

Schibsted’s market capitalisation was around 75 billion crowns after Tuesday’s share price surge.

“We consider such a move a major positive in terms of highlighting the online classifieds values of the company,” Pareto said in a note to clients.

Schibsted’s ‘A’ shares were up 10.5 percent at 328.8 Norwegian crowns at 1013 GMT while its ‘B’ shares had surged 13.8 percent to 305 crowns.

SIGNIFICANT SHAREHOLDER

The new entity - provisionally named MPI - will have international operations in 17 countries including Germany, France, Brazil, Morocco and Thailand and currently has a staff of around 2,800.

“MPI will be one of the global leaders in online classifieds, fully equipped to achieve long-term growth with high-profit margins,” Schibsted said.

Schibsted will maintain a majority stake in the new firm at the time of the listing, and said it plans to remain a significant shareholder over the long term.

The IPO is expected to take place in the first half of 2019, but the company has not yet decided whether the listing should take place in Oslo or elsewhere, it told Reuters.

Unlike Schibsted, MPI will not have a two-tier system of shareholders, opting instead to assign equal voting rights to all owners.

Separately, Schibsted has decided to maintain full ownership of its Lendo financial service, despite significant interest from potential partners, it added. ($1 = 8.1750 Norwegian crowns) (Reporting by Terje Solsvik and Camilla Knudsen; Editing by Jason Neely and Susan Fenton)

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