Shipping went all of 2016 without a mainstream IPO for the first time since 2009, and while they could return later this year, there might be a catch.
Two panelists in a group of investment bankers at Capital Link’s international shipping forum say that while it’s unlikely a mob of shipowners will rush through an open IPO window, one or two might be clever enough to find the back door.
Eric Schless, managing director for Wells Fargo Securities, referenced last week’s $364m all-shares deal between John Fredriksen’s Golden Ocean Group and privately owned Quintana Shipping of Greece as a possible blueprint.
Quintana deal
Quintana had filed for a New York IPO two years ago for its fleet of bulkers, but with the market effectively closed had withdrawn its prospectus shortly before the Golden Ocean deal.
Golden Ocean’s shares climbed in the wake of the deal.
“That was healthy and I think it was rewarded by the market,” Schless said.
“It does demonstrate that if you do it, you’ll get paid for it and hopefully that will drive some decision-making.”
Asked directly about IPOs in 2017, Schless added, “My prediction is there will be another Quintana-type deal done this year which will be very healthy — other than that, I’m not going to stick my neck out.”
But Todd Wilson, shipping banker for Jefferies, quickly lent support.
“I would agree with Eric that you could see an IPO by merger this year,” he said. “But I also think there are investors out there who would invest in the right (conventional) IPO.
“Maybe something with vessels that were bought at low valuations over the past 12 to 18 months. It might not have giant scale, but maybe a bet on a global macroeconomic recovery than has limited downside. I think we could see one this year.”
Non-traditional IPO?
Christa Volpicelli, managing director at Citi, said she also could envisage a deal “that may not be the traditional, regular-way IPO.”
But she added that the IPO market also could be damaged by the approach of an owner otherwise not well qualified, but trying to seize on momentum in dry bulk.
Volpicelli acknowledged that she probably sounded much like a shipowner warning other owners not to order newbuildings.
“It’s the last thing we need,” she said.
For more news from the Connecticut Maritime Association, Capital Link and other events this week, click here.
