Dong surges to DKK 107bn market cap after record IPO

Mikkel Stern-Peltz
10 June 2016

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Goldman Sachs-backed Danish energy group Dong Energy was valued at DKK 98.2bn in its Copenhagen IPO, becoming the largest-ever Danish flotation and the yearтs largest European listing in the process.

The IPO was priced at DKK 235 per share and surged to DKK 255.5 by final close on its first day of trading on Nasdaq OMX Copenhagen, pushing its market cap past DKK 105bn. Initial proceeds from the listing were DKK 17.1bn, though the figure could increase to DKK 19.6bn depending on the greenshoe.

Goldman Sachs Asset Management's holdco, New Energy Investment, sold 4.51% of its shares in Dong, bringing its stake from 17.9% to 13.39%. With the IPO, Goldman's investment in Dong has returned around DKK 10bn and the bank has tripled the company's valuation in three years.

Following the IPO, the Kingdom of Denmark remains the majority shareholder with a 50.4% stake – and is obliged to retain at least 50.1% at any time – while energy cooperative SEAS-NVE reduced its stake from 10.8% to 9.61%.

Leading up to the flotation, Dong's bookrunners had closed the subscription period early due to extremely high demand for shares in the renewables-heavy business, with more than 36,000 investors receiving an allocation.

JP Morgan, Morgan Stanley and Nordea were appointed joint global coordinators and joint bookrunners, while Citigroup, Danske Bank and UBS were acting as joint bookrunners. ABG Sundal Collier, Rabobank and RBC were selected as co-lead managers.

Lazard & Co and Rothschild acted as financial advisers to Dong and the Danish government, respectively.

Previous funding
Goldman Sachs acquired a 17.9% stake in Dong from the Danish state in a 2013 MBO, paying DKK 8bn at a DKK 32bn valuation.

Company
Founded in 2006 as an amalgamation of several Danish energy companies, Dong Energy (Danish Oil and Natural Gas) is a state-owned energy company headquartered in Fredericia.

The group builds and operates mainly offshore wind farms across Europe and the rest of the world, in addition to providing power generation and transmission services in Denmark.

Advisers
Vendor – Rothschild (corporate finance).
Company – Lazard (corporate finance).