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E-commerce Company Cnova Raises $187.6 Million in its US Initial Public Offering

Date:21-11-2014

Shares of Cnova, edged up on their American trading debut on the NASDAQ stock market. The stock closed up 2 percent, at $7.15.

Yet the initial public offering price was well below what had been expected, a sign that global e-commerce is increasingly competitive.

The e-commerce company which is a part of the Casino Group, which had taken control of Grupo Pão De Açúcar in 2012, sold 26.8 million ordinary shares at $7 per share, a drop from the $12.50 to $14 a share it had estimated in a preliminary prospectus last month.

Cnova, incorporated in the Netherlands, but the company conducts most of its business in Brazil and France, raised net proceeds of $141.6 million in the offering. According to its final prospectus, shares could rise to $168.1 million if in an overallotment option, an additional 4.02 million ordinary shares are purchased in the next 30 days. Following the I.P.O, its founding shareholders are expected to control 93.9 percent of the company.

The company which sells home furnishings, home appliances and consumer electronics, faces a competitive landscape here. AliExpress of Alibaba is making inroads in Latin America. B2W of Brazil, owned by Jorge Paulo Lemann, the Brazilian billionaire and his partners Beto Sicupira and Marcel Telles is dominant.

In its prospectus, Cnova said that its market share in Brazil had increased to 19 percent as of June 30 from 8 percent in 2008.

The company added that it would use the new capital to propel growth, in particular strengthening its international marketplaces and direct sales businesses. This includes development of the company’s international businesses in new geographies and launch of new specialty websites. However, the e-commerce company did not specify which markets. Cnova has operations in nine countries including three in Latin America.

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