February 10, 2016 / 7:40 AM / 2 years ago

UPDATE 1-Scandinavian Tobacco Group gets market cap of 10 bln DKK in Copenhagen IPO

* STG sets IPO price at 100 DKK/shr vs initial range 93-110

* STG IPO is Europe’s largest so far this year (Adds detail, background)

STOCKHOLM, Feb 10 (Reuters) - Scandinavian Tobacco Group (STG) has set the price in its initial public offering (IPO) at 100 crowns per share, giving it a market capitalisation of 10 billion Danish crowns ($1.51 billion) ahead of its market debut in Copenhagen on Wednesday, the company said in a statement.

In terms of the value of shares sold, 3.56 billion Danish crowns ($539 million) not including an overallotment option, STG’s IPO is Europe’s biggest so far this year and comes against a backdrop of sharply lower equity markets on mounting concerns over global economic growth.

Meanwhile, shares in tobacco companies, seen as safe havens as they are less sensitive to swings in the economic cycle, have weathered the turmoil well.

Shares in London-listed British American Tobacco and Imperial Brands are down just 1 and 2 percent respectively this year, against a 15 percent drop in the pan-European FTSEurofirst 300 index

Shares in moist snuff maker Swedish Match, which held 49 percent of STG prior to the IPO, are down 5 percent this year.

Swedish Match and Skandinavisk Holding II A/S, which is controlled by two Danish foundations, are selling 17.8 million shares each in the offering and may sell an additional 2.2 million shares each through an overallotment option.

STG’s IPO is Copenhagen’s first since March last year as the bankruptcy of ship fuel supplier OW Bunker just months after its 2014 listing severely dented appetite for new companies.

The price for shares in the cigar maker was set slightly below the middle of an initial price interval of 93 to 110 crowns per share.

J.P. Morgan, Deutsche Bank and Nordea managed the IPO as global coordinators. FIH Partners was financial advisor to STG. ($1 = 6.6071 Danish crowns) (Reporting by Sven Nordenstam; by Alistair Scrutton)

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