June 30, 2022
09:18
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The dredger and builder of offshore wind farms DEME was split off from the construction group CFE this morning. At the first listing, the brand new share immediately shot up almost 15.
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Analysts had speculated for years that DEME and its (former) parent company CFE would go their separate ways. DEME may have been the center of gravity and the profit engine of the Brussels construction company, but there were not many synergies with CFE’s real estate development, construction and installation activities. Moreover, a separate listing could better reveal the value of the dredger.
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The joy of the shareholders of CFE was therefore great when it was announced in December that DEME would be listed separately on the Brussels stock exchange by the summer† Behind the scenes, this operation was the work of Ackermans & van Haaren, which is CFE’s reference shareholder with a stake of 62.10 percent. The split operation was carefully prepared and proceeded according to plan. In mid-May, CFE announced that the IPO would take place on June 30. Shareholders of CFE will receive an equal number of new DEME shares.
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Split Key 96/10
The ‘old’ CFE share closed on Wednesday at 106 euros. It was split after market in a DEME aandeel share
worth 96 euros and a ‘new’ CFE share
, good for 10 euros. Remarkable: the split key was not communicated in advance, neither by CFE nor by DEME, and only became clear at the stock market debut.
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It was generally expected that DEME would move higher at the start of trading and that CFE would fall. That also happens: DEME opened 14.6 percent higher at 110 euros, CFE immediately fell 14 percent. In the meantime, ‘newcomer’ DEME is already trading more than a sixth above the reference price.
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These price movements are not surprising. Many shareholders were in CFE because of DEME and were less interested in the construction activities. In recent years, DEME has developed from a dredging company into a versatile group that also installs wind farms – from foundations over the mast and gondola to the blades – and is active in soil remediation, deep-sea mining and green hydrogen. The company is internationally active and because of its specialized equipment – especially dredging and installation vessels – very capital intensive.
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no trash can
Yet there is also value in CFE. In an interview with De Tijd CEO Piet Dejonghe and his successor Raymund Trost underlined a month ago that CFE’s remaining activities are not a ‘trash can’ and that CFE is ‘so much more’ than a construction company. Real estate development and multitechnics are also core activities.
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Coincidence or not, DEME’s IPO is happening just as a takeover bid – from reference shareholder HAL – is underway for its major Dutch competitor Boskalis. If that offer is successful, Boskalis could disappear from the stock exchange. Then only one of the four large dredging companies in the Low Countries would be on the stock exchange. In addition to DEME and Boskalis, this concerns Jan De Nul and Van Oord, both of which are family owned.
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