Hapag Lloyd Extends IPO Deadline amid Subdued Demand

German container shipping company Hapag Lloyd has extended its initial public offering (IPO) by a week to November 3rd, according to Frankfurt stock exchange.

Hapag-Lloyd was planning to start trading on Friday. However, as reported by Reuters, the interest in the shares is believed to be subdued, especially following Maersk’s cutting of profit outlook.

Despite Maersk’s announcement, Hapag-Lloyd said that its outlook for 2015 remains unchanged.

Analysts at Drewry Maritime Equity Research (DMER) have advised investors to subscribe to Hapag-Lloyd’s trimmed IPO, standing at USD 300 million, saying that the German container line has set an attractive price for its shares.

Hapag-Lloyd’s price band of EUR 23–EUR 29 per share translates into a 2016 P/B of 0.52x to 0.66x, compared with the average P/B multiple near 1x for the industry peers.

Quoting sources familiar with the mater, Reuters said that the price is likely to be set at the lower amount, adding that the possibility of cancelling the offer was not ruled out.

The timing and merits of the Hapag-Lloyd’s public offering have been questioned given the prolonged low freight rates and subdued global demand.

World Maritime News Staff

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