Italian liquor company Campari (CPRI.MI) recently secured 1.2 billion euros ($1.3 billion) by issuing new shares and convertible debt. This funding strategy was designed to finance the acquisition of French cognac brand Courvoisier, announced last month.
Campari Raises $1.3Bn Selling Shares and Debt for Acquisition
Capitalising on favourable market conditions, Campari joined the wave of issuances seen across Europe since the beginning of the year. The Courvoisier acquisition marks the largest in Campari’s history, which has seen consistent growth through various acquisitions.
The company priced its new shares at €9.33 each, a 6% discount from the closing price on Tuesday. The shares were rapidly distributed through an accelerated book-building process.
However, Campari’s share price dropped by 5% to €9.4 at 1000 GMT, marking the most significant decrease in the pan-European STOXX 600 (.STOXX) index as the market adjusted to the new share pricing.
Analysts have noted that China’s anti-dumping investigation into European Union-imported brandy will have a minimal impact on Campari. This is partly due to Courvoisier’s strong revenue base in the United States. Cognac, the product at the heart of this deal, is a premium brandy produced in the Cognac region of southwestern France.
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In December, Campari outlined its financing strategy for the Courvoisier purchase, involving a combination of debt, cash, and equity or equity-like instruments, alongside a focus on accelerating debt reduction.
Additionally, Campari has issued senior debt to private investors, with an option to repay at maturity in January 2029 by issuing company shares. The €550 million bond’s conversion price is €12.3623 per share, a 32.5% premium over the new share issuance price.
The company stated that some bond investors mitigated risk through short-selling Campari’s shares. The funds raised will support Courvoisier’s acquisition and other corporate needs, aiming to improve Campari’s capital structure by reducing debt and extending average maturity.
