Sector News

Livent shares end slightly down on market debut

October 12, 2018
Chemical Value Chain

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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