Ardagh is pushing ahead with preparations for a flotation next year in New York with plans to sell shares that carry a tenth of the voting rights of existing shareholders led by chairman Paul Coulson.
In a filing published by the US Securities and Exchange Commission late on Thursday, the operating Ardagh Finance Holdings will sell Class A shares which will carry one vote each. The remaining Class B shares, which will have 10 votes each, will stay in the hands of a holding company at a higher level in its corporate structure.
The concentration of control will initially have little impact, given that Ardagh is understood only to initially be targeting a 5 per cent stake sale, raising in the region of €250 million, but it may become more of an issue as the company places further shares in the coming years.
“Because of the 10-to-1 voting ratio between our Class B and Class A common shares, our parent company will continue to control a majority of the combined voting power of our issued and outstanding share capital even when Class B common shares represent substantially less than 50 per cent of all issued and outstanding common shares,” Ardagh said.
Mr Coulson currently owns about 36 per cent of the group.
Share classes
The use of different share classes is not uncommon in US listings. Denis O'Brien planned a similar type of offering when he sought to float Digicel on the New York Stock Exchange last year before the transaction was pulled.
Mr Coulson has indicated he hoped to see a float on the New York Stock Exchange in March or April, subject to market conditions. The filings this week are part of that process. Citigroup will act as lead book-running manager.
The initial public offering (IPO) would give Ardagh access to the equity market to help fund future acquisitions and reduce debt levels. The filings do not confirm a target for how much will be raised, with these details and the offer price to be finalised closer to flotation.
Mr Coulson has used debt markets over the years to grow Ardagh into a global player, from its roots as the Irish Glass Bottle Company. In June, it paid $3.4 billion (€3.2 billion) to buy the beverage cans business from US company Ball Corporation and Britain's Rexam, leading to a major expansion into this sector.
While the latest filings say that Ardagh’s immediate priority is lowering its leverage ratios, with gross debt standing at €8 billion at the end of September, they note that “there are still significant opportunities for further growth by acquisition.”
Aggressively refinanced
Ardagh has signalled a return to the market since 2011. It pulled a planned float of its metal containers unit last year. The company has aggressively refinanced debt this year, taking advantage of record low interest rates and recently reported a 38per cent rise in revenues for the third quarter.
The group is a global leader in glass and metal packaging, providing packaging for most of the world’s leading brands. It operates in 22 countries, employing 23,500 people and has global sales exceeding €7.8 billion.
It plans to pay a quarterly dividend from the outset of its life as a public company, according to the documents.
