Shares in Dong Energy rose 10% on 9 June as the state-owned Danish company, a global leader in offshore wind, successfully brought to fruition what turned out to be the world’s biggest stock market listing so far this year. Dong, Denmark’s largest energy company, priced its initial public offering in Copenhagen at DKr235 per share. But in early trading on the first day of trading, 9 June, the company’s shares had risen to DKr259, valuing the group at DKr108 bn or $16.5 bn.
The offering turned out to be very popular, so much so that on the afternoon of 7 June Dong was able to announce the close of its initial public offering, including the early close of its offering to retail investors.
This is the company’s second attempt at an initial public offering following an abortive effort in 2008. But in the meantime Dong has undergone one of the most complete transformations of any European utility in recent times. A few years ago it was almost entirely focused on power generation and oil exploration in Denmark. It now has nearly 75% of its capital tied up in the development and operation of offshore wind farms, a sector that is heavily subsidised by governments, in particular those of the UK and Germany.
The listing enabled existing shareholders — the principal ones being the Danish government and financiers Goldman Sachs — to sell 17.4% of the company, without the necessity to raise fresh capital. The gross proceeds from the IPO were DKr17.1 bn ($2.6 bn) and that could rise to DKr19.6 bn if the option is exercised in full to sell the ‘overallotment’ allocation of a further 2.6% of stock within 30 days of the first issue. The Danish government will remain a majority shareholder, at 50.4% (from 58.8%) while Goldman Sachs is retaining a stake of 13.4%.
Claus Hjort Frederiksen, Denmark’s finance minister, said: "As a representative of the majority shareholder, I’m pleased to see that there has been a lot of interest in becoming part of the ownership of Dong Energy, both among retail and professional investors. It gives Dong Energy a solid foundation to retain and develop its position as one of the leading green energy companies in the world."