Shares in Livent, the lithium producer spun off from FMC Corp., ended just below their IPO price at $16.97 on their first day of trading on the New York Stock Exchange on Thursday, after falling around 5% during the day. This outcome, however, came in the midst of a widespread sell-off in stock markets in the United States and around the world, and thus represented a significant outperformance relative to the market on the day. Livent shares were offered to investors at $17, below the $18–20 range the company originally expected, and raised $340 million net of expenses, most of which go to FMC. The underwriters have an option to buy a further 3 million shares at the IPO price, less expenses. Livent says it will use the net proceeds from the offering to make a distribution to FMC and to fund origination fees associated with its revolving credit facility. At its open Livent had a market capitalization of $2.34 billion.
Following the IPO, FMC says it expects to retain approximately 85% of Livent’s outstanding common stock until such time as it chooses to distribute the remaining Livent shares to existing FMC shareholders through a spin-off or split-off, to complete the full separation of the two companies.
The Livent IPO came at a time of increasing investor caution toward lithium-related stocks, following widespread expectations of looming overcapacity due to a raft of major expansions worldwide. Lithium prices have halved this year in China, the world’s largest consumer of the metal. A rival Chinese lithium producer, Ganfeng Lithium, saw its shares fall by more than 10% on their first day of trading on the Hong Kong stock market yesterday, being down as much as 29% at one point, after the company raised $442 million in an IPO.
By: Natasha Alperowicz
Source: Chemical Week
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