Pricing of Turkey's Mavi Jeans IPO at bottom end of range

Pricing of Turkey's Mavi Jeans IPO at bottom end of range
Mavi's IPO at the Bourse Istanbul raised around TRY1.17bn but priced at the bottom end of the range.
By bne IntelliNews June 12, 2017

The initial public offering (IPO) of Turkish jeans fashion retailer Mavi Giyim priced at TRY43 (€11) per share, a price at the bottom end of the range which valued the company at around TRY2.14bn ($606mn).

The obtained price was announced on June 12 in a bourse filing by Turkey's Is Yatirim, the domestic coordinator and bookrunner for the offering in a brand favoured by Lady Gaga and Chelsea Clinton, among other A-list celebrity luminaries.

In the IPO, Mavi Giyim sold a total of around 27.3mn shares, or roughly a 55% stake in the enterprise, raising around TRY1.17bn.

The Akarlilar family, the founding family behind Mavi Giyim, and Turkven Private Equity Fund II, held bookbuilding over June 8-9 to offer a stake of up to 55% in an Istanbul stock exchange IPO with a price range of TRY43-51.6 per share.

On May 12, ambitions to make the London Stock Exchange (LSE) initial public offering of Turkey’s Global Ports Holding (GPH) one of the biggest London listings of the year also hit a setback when the float priced at the bottom end of the range. 

Some 73.9% of the shares in the Mavi IPO were sold to foreign institutional investors while 18.9% were sold to domestic institutional investors, with 7.2% picked up by domestic individual investors, according to the statement from Is Yatirim. Singapore’s Temasek Holdings purchased 2.4mn shares, 10.11% of the total offering, while British fund Templeton purchased the same amount of shares.

Of other British funds, Universities Superannuation Scheme Ltd acquired 2.1mn shares while Carrhae Capital and Charlemagne Capital bought 1.8mn shares each. US-based Neuberger Berman Inv Advisers also purchased 1.8mn shares and UAE’s Abu Dhabi Inv Authority (Adia) acquired 1.55mn shares.

Trading in Mavi shares should begin on June 15.

Akarlilar family remains the biggest shareholder in Mavi while Turkven has retained a minority stake following the IPO.

Mavi Jeans was founded in 1991. Turkven acquired a minority stake in the company in 2008. By 2016, Mavi was the 166th biggest company in Turkey, according to Fortune 500 Research, up from the 189th and 221st places recorded for the firm in 2014 and 2013, respectively.

The consolidated revenue of Mavi rose 18% y/y to TRY1.05bn in 2016 while the company is targeting a 24% y/y increase to TRY1.31bn in 2017. Mavi’s net income jumped to TRY33mn in 2016 from TRY2mn in 2015. The company also targets 55% y/y of net profit growth to TRY52mn in 2017.

Mavi (Turkish for “blue”) has flagship stores in cities including New York, Moscow, Hamburg, Berlin, Vancouver and Montreal. Kate Winslet is another celebrity who wear its jeans brand, while in 2012 Brazilian model and actress Adriana Lima signed a contract with the firm for a marketing campaign with a series of commercials.

The company sells more than 7mn pairs of jeans each year through more than 390 Mavi stores and over 5,000 points of sale in more than 50 countries.