Klene Deal
Sweet Offering
G
14
rabobankers at work
WHAT'S News Issue 4 April 1997
The corporate equity offering for Kiene marked Rabo Securities' third success in
a very short time. 'The response was terrific. We expected brisk retail demand.
The real surprise was the demand from third party institutions and other banks
- it was practically overwhelming,' says Jan Quist of Rabo Securities, one of our
investment banking activities.
The equity offering came on the heels of
our lead management and placement of
NLG 150 million cum prefs for Nutreco
(see deal of the month) and our
Amsterdam listing of AND Publishers Ltd.
Rabo Securities has so successfully
established itself as a serious contender in
the highly competitive domestic equities
market that it is sometimes hard to
remember how recently it arrived on the
scene - and how hard its staff have
worked to achieve success.
It was only two years ago that Rabo
Securities was born out of a strategie
recognition that we needed to better serve
our clients with primary investment
products. This was an important shift;
traditionally, of course, we had a far
higher profile as a fixed income house
than we did in equities in spite of our
position as the Netherland's leading retail
bank Soon after Rabo Securities was
launched, we were able to take part as
joint-lead managers in the large,
multistage privatization of KPN, the
former public telecoms utility, and also in
those of Van Leer and Vendex. Having
demonstrated our distribution skills, we
were ready to go into the next phase, the
true mark of important domestic equity
issues in our own right.
PIECE OF THE PIE
The corporate equity offering for Kiene
Three sweet
0
1 teamworkers Hans
a.
van den Brande
CL
5 (left), Jan Quist and
I Dick de Bruijn
shows a real breakthrough as primary
equity house is imminent, certainly given
the number of deals in process. 'You can't
just hold out your hand and expect a piece
of the pie simply because of your strength
as retail distributor,' explains Quist. 'In
our game, at a certain point, you need to
have something to bring to the table as
well. This was a critical challenge.'
Jan Quist explains how we went about
securing this prize - our lead management
of the corporate equity offering for the
Dutch confectionery producer Kiene
Holding NV - a company with 1996 sales
of some NLG 60 million and a stated
profit of NLG 3.6 million.
'Rabobankers had to rally real strengths:
short-lines of decision making, an ability
to rapidly mobilize assets, and above all a
high level of internal cooperation,' says
Quist. 'When you're talking about placing
shares worth more than NLG 30 million,
you need to mobilize your whole retail
and institutional distribution network. On
the retail side, the marketing and sales
unit at IRIS played a crucial role in
feeding our affiliated banks and making
this issue a success.'
DEADLOCK
Directly involved with Quist in originating
the deal at Rabo Securities, were Dick de
Bruijn and Hans van den Brande. They
were instrumental in resolving an
unhealthy deadlock that had developed
between Kiene and its leading shareholder^
(with an 83 per cent stake in the firm).
Last December this shareholder suddenly
expressed a willingness to sell the stake in
question to management. The normal
procedure would have been to arrange a
secondary offering of these shares on the
market, but the shareholder insisted that
the offer be accepted by a specified date:
that is, he was unwilling to run the risks
that such an offering would entail. Rabo
Securities quickly filled the gap.
'We had just ten days to evaluate the
market risk, carefully look at the
company, assess the quality of its
management and consider its overall
business outlook,' Quist explains. Finally,
origination approached the Rabobank
International executive committee with a
proposal that the 83 per cent stake be
acquired (and thus effectively M
underwritten) with a view to placing it on™
the open market at a somewhat later date.
HANDS ON BUSINESS
'This was a calculated risk. There was
always a chance that the value of the
shares might drop, or that some skeleton
might appear in the company's closet. But
we looked at the company very
thoroughly. Its management was triple-A
and its business prospects were bright. If
the share price was somewhat depressed,
this was only because of the ongoing
standoff with its leading shareholder. At
the end of the day, the board realized that
Kiene was indisputably part of the
core food and agribusiness that we're keen
to defend and expand.'
'The secret of our success was primarily
the speed and quality of teamwork,'says
Quist. 'Execution of the deal was carried
out in typical Rabobank style.'
The Kiene shares, numbering a total of
838,900, were brought to market - at
NLG 43 per share - two months after they
were first acquired.
Two years ago, Rabo Securities was still
but a gleam in the strategists eye. If it has
now established a firm profile on the
skyline of Dutch finance, it is because of
the unique speed and flexibility of
Rabobankers at work.
ZOETE DEAL KLENE
De nieuwe beursgang van
Kiene markeerde het
derde succes van Rabo
Securities in korte tijd. Volgens Jan Quist van
Rabo Securities was er overweldigende
belangstelling, niet alleen van de voor de
hand liggende partijen, maar ook van
institutionele beleggers en andere banken.
