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Markets

Coffee maker JDE Peet's IPO wrapped up in just 72 hours

JDE Peet's, whose brands include Douwe Egberts, Peet's Coffee and Jacobs, is Europe's biggest initial public offeri
29 May 2020
  • JDE Peet's, whose brands include Douwe Egberts, Peet's Coffee and Jacobs, is Europe's biggest initial public offering (IPO) this year. It raised 2.25 billion euros ($2.50 billion) in its market debut on Friday.
  • A total of 20 banks are expected to pocket an overall $59.8 million in fees, with global coordinators BNP Paribas, JPMorgan and Goldman Sachs earning about $6.2 million each, Refinitiv estimates show.

LONDON/PARIS: It took just three days to sell shares in JDE Peet's as investors facing a dearth of opportunities because of the coronavirus-induced slow-down rushed to secure a dose of the world's No. 2 maker of packaged coffee.

JDE Peet's, whose brands include Douwe Egberts, Peet's Coffee and Jacobs, is Europe's biggest initial public offering (IPO) this year. It raised 2.25 billion euros ($2.50 billion) in its market debut on Friday.

A total of 20 banks are expected to pocket an overall $59.8 million in fees, with global coordinators BNP Paribas, JPMorgan and Goldman Sachs earning about $6.2 million each, Refinitiv estimates show.

Strong investor interest from the likes of George Soros' Quantum Partners prompted JDE to bring forward the deal, which was expected in June.

Pent-up demand and virtual marketing turned out to be more efficient than traditional roadshows, saving investors' time and potentially paving the way for long-term changes to how IPOs are sold.

Advisers on the deal started to lure investors early this year before the novel coronavirus brought Europe to a halt, a banking source involved in the work said.

"The positive reaction of investors gave us the confidence that there would be enough demand for the deal at a reasonable price, even in exceptional circumstances," the source said, asking not to be named.

The process gathered pace over the last three weeks, with virtual roadshows completed in just 72 hours, instead of management travelling for at least a fortnight to meet investors at fancy hotels around the world, two sources close to the deal said.

Back-to-back calls with management and analysts took place on Webex and other technology platforms, as advisors set up dedicated lines for investors to dial in.

The largest conference call had 150 investors on the line, one of the sources said.

For all the success of JDE Peet's, the number of new IPOs is expected to be low this year, with only big companies present in several countries and active in resilient industries likely to attempt a similar float.

"The market remains very selective," a second source said.