Campari was waiting for the best time and way to raise the necessary funds to finance the acquisition of the Courvoisier cognac last month, the largest operation in the group's history and perhaps the CEO's last Robert Kunze-Concewitz, who announced his retirement next April. And the moment has come: the Spritz house has collected 1,2 billion through the issuance of new ordinary shares and convertible bonds.
The Campari stock, already under pressure due to China's launch of a anti-dumping investigation on some spirits from the European Union, it was down by mid-morning by 5,62%, to 9,36 euros per share.
In mid-December, on the occasion of theacquisition of Courvoisier, which is expected to increase Campari's net sales by approximately 9% and earnings per share by 2%, the company had obtained a grant from a group of banks bridging loan precisely from 1,2 billion euros for 24 months saying that it would monitor the markets for financing alternatives. The Cognac operation is generally rated very well by analysts. Equita Sim underlines that "this is the most significant acquisition in the group's history (after Grand Marnier, with an EV of 652 million in 2016)" and sees "a strong strategic rationale".
New ordinary shares for 650 million at 9,33 euros, 6% discount
The good moment came in the last few hours when Campari was able to place new ordinary shares via accelerated bookbuilding worth €0,01 each for gross proceeds of approximately €650 million € 9,33 per share (with a 6% discount on Tuesday's closing value of 9,93 euros) and a nominal amount of senior unsecured convertible bonds maturing in 2029 of 550 million, convertible into new ordinary shares. For a total of 1,2 billion euros.
With this placement “the group took advantage of the favorable conditions market to optimize the financing structure. The net proceeds will be used to finance the transaction and for general corporate purposes,” a statement said. The placement will improve the group's "pro forma capital structure by accelerating the deleverage process and will lengthen the average maturity of liabilities, further strengthening the financial profile of the issuer and enabling further growth". The new shares will confer i same rights, including the right to the dividend, due to the existing ordinary shares, represent 5,6% of the ordinary capital issued and in circulation.
5-year convertible bonds for 550 million, coupon 2,375%
As for the convertible bonds for an amount of 550 million, they have an annual coupon of 2,375%, payable in semi-annual installments expiring on 17 July and 17 January of each year, with the first coupon payable on 17 July 2024. The bonds will have a maturity Of 5 years (unless they have previously been redeemed, converted, repurchased and cancelled) and will be redeemed at the end of their life (around January 17, 2029) at their face value.
Il initial conversion price was set at 12,3623 euros, incorporating a 32,5% premium applied to the reference price of the shares. Initially, each bond will be convertible into 8.089 shares for a total issuance of 44,5 million shares representing 3,8% of the issued and outstanding capital and 3,6% of the issued and outstanding ordinary capital following the completion of placement. Convertible bonds may be refunded before expiry with a notice of no less than 30 days (and no more than 60 days) at their nominal value, in addition to interest accrued but not yet paid starting from 7 February 2027.
Campari intends to submit the request for admission to trading of the convertible bonds on Euronext Access Milan. BofA Securities Europe and Goldman Sachs Bank Europe acted as structuring global coordinators and together with Crédit Agricole Corporate and Investment Bank, Intesa Sanpaolo S.p.A. and Mediobanca – acted as joint global coordinator and joint bookrunner. PedersoliGattai, Houthoff and Cravath acted as legal advisors and Biscozzi Nobili Piazza as tax advisors for the issuer, while Linklaters acted as legal advisor for the Joint Global Coordinators and Joint Bookrunners.
