Jewellery firm Pandora’s owners ready IPO – sources

* Intention to float seen coming within weeks – sources

* Nordea tipped to manage retail sale – source

* Some valuations as high as $5.1 bln – source

By Ole Mikkelsen

COPENHAGEN, Aug 27 (BestGrowthStock) – Danish jewellery maker
Pandora’s owners are preparing an initial public offering of
stock and are likely to unveil their flotation plans within
weeks, investment banking sources close to the matter said.

Pandora, established as a Copenhagen jeweller’s shop in
1982, has grown rapidly over the past decade into an
international company with manufacturing in Thailand and 2009
sales of 3.46 billion Danish crowns ($590 million).

Pandora Holding A/S reported this month a 105 percent
increase in six-month sales to 2.58 billion crowns and a 41
percent rise in operating profit to 892 million, and said it
expected growth to continue in the second half of the year.

“With the half-year report, they are clear for a listing,
and the intention to float can be forthcoming soon,” one
investment banker close to the deal said.

Nikolaj Vejlsgaard, partner at private equity investment
firm Axcel which holds 59.3 percent of Pandora, told Reuters:
“We never really comment on our plans for exiting (an
investment).”

But the Pandora board member added that, like Axcel’s
holdings in other companies, its stake in Pandora would
eventually be for sale:

“We are not long-term owners, being a private equity fund,”
Vejlsgaard said. “We are happy with the company. It is a good
investment, and we are happy with its development.”

Another banking source said Nordea (NDA.ST: ) (NDA.CO: ), which
financed Axcel’s purchase of its majority stake in Pandora in
2008, would manage the retail part of the stock offering.

Foreign investment banks would run the sale to institutional
investors, he added.

The first source said some estimates of the market value of
Pandora were as high as 14-15 times earnings before interest,
tax, depreciation and amortisation (EBITDA), but he said that
was probably too high a multiple.

Pandora’s EBITDA was 1.02 billion crowns in the first half
of the year, up 56 percent. Assuming an only flat development in
the second half, 2010 EBITDA could exceed 2 billion crowns which
on a multiple of 14-15 times would value it at 28-30 billion
crowns ($4.78 billion – $5.12 billion).

He said a multiple of 11 times EBITDA would be more
realistic, and he compared Pandora to better-known U.S. and UK
jewellery industry peers such as Zale (ZLC.N: ), Blue Nile
(NILE.O: ), Signet Jewelers (SIG.L: ) and Saks (SKS.N: ), which he
said traded at 8-13 times expected EBITDA.

A third source said this week that Pandora has appointed
banks to handle the IPO.
Pandora’s international breakthrough has depended heavily
on its charm bracelets. Its charms and silver and gold charm
bracelets accounted for 86 percent of total revenue in the first
six months of the year and continued to grow rapidly.

“Pandora has shown itself to be resilient to the economic
crisis, but fashion can be unpredictable,” one banker said. “No
one knows how long there will be demand for their big-selling
charms.”

A listing and stock offering for Pandora would represent a
further thawing of the Danish IPO market after food ingredients
maker Chr. Hansen (CHRH.CO: ) rejoined the bourse in June.

Other Danish commpanies seen waiting in the wings for large
stock offerings include cleaning services giant ISS and telecom
operator TDC (TDC.CO: ), which is listed but 87.9 percent owned
by private equity investment firms.
(Reporting by Ole Mikkelsen; Additional reporting by Mia
Shanley in Stockholm; Editing by Michael Shields)

Jewellery firm Pandora’s owners ready IPO – sources