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Emmi shares prove a hit at the bourse

"Say cheese"...there's something to smile about Keystone

Investors have snapped up shares of dairy firm Emmi as the company made its debut on Monday at the Swiss stock exchange (SWX) in Zurich.

This content was published on December 6, 2004 - 18:12

The shares went for as much as ten per cent higher than the issue price.

In only the fourth Swiss initial public offering this year, Emmi priced its stock at SFr100 ($87.76) – the top end of its indicated range of SFr90-100 and said each share was ten times over-subscribed.

After opening at SFr104.50, the Emmi share closed the day at SFr108.30, some 8.3 per cent higher than the issue price.

Analyst Reneé Weber at Bank Vontobel said strong demand had given the stock a boost at the opening but he was more cautious about the long-term potential.

“With our fair value at SFr105, we see only a modest potential trajectory for the stock,” he wrote in a note.

Growth abroad

Emmi has been diversifying in recent years from pure milk and cheese products into higher-margin Caffe Latte drinks and aloe vera yoghurts, with which it hopes to drive growth abroad.

Monday’s flotation raised SFr100 million, which Emmi has said it would use to pursue targeted acquisitions to strengthen its distribution network in Europe.

It is targeting growth mainly in Germany, Austria, Italy and North America.

The company is soon expected to reach an annual turnover of SFr2 billion, a quarter of which is achieved through exports.

Free float

Up to 25 per cent of Emmi’s enlarged share capital will be in free float after the public offering, while the dairy cooperative, the Central Swiss Milk producers, will retain a majority of shares.

The Emmi name is widely recognised in Switzerland, which produces 3.8 billion litres of milk a year, or 430 litres per person.

The healthcare firm Ypsomed, chipmaker austriamicrosystems and biotech firm Basilea Pharmaceutica floated in Switzerland earlier this year.

swissinfo with agencies

Key facts

Emmi:
Turnover 1993: SFr500 million ($396 million).
Turnover 2005 (estimated): SFr1.95 billion.
Employees: about 2,600.
Suppliers: About 90,000 cows from 5,450 dairy farmers.
Switzerland produces 3.8 billion litres of milk a year, or 430 litres per person.

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In brief

The opening price of the Emmi share on the SWX Swiss Exchange was SFr104.50. This corresponds to a market capitalisation of SFr450 million.

At the end of Monday trading, the share finished at SFr108.30.

The flotation raised SFr100 million, which Emmi will use to expand.

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