Infineon May Surpass Bayer When Shares Start Trading Monday
Munich, March 10 (Bloomberg) -- Infineon AG could become one
of the 10 most valuable companies on the Frankfurt Stock Exchange
when shares start trading Monday.
A 50 percent gain in its stock price would give Europe's
third-biggest computer chipmaker a market value of 30 billion
euros ($29 billion), leapfrogging Bayer AG, now the ninth-biggest
company in Germany's benchmark Dax index. Such a rise is possible
because brokers are offering shares three times higher than the
price range the company's using during order-taking.
Infineon's 6 billion-euro share sale and financing plans of
companies ranging from Lycos Europe to T-Online International AG,
Deutsche Telekom AG's Internet unit, come as Germans are signing
up to buy shares in record numbers, hoping to get better returns
than from bonds or savings accounts.
``There's a lot of money looking for a new home out of bond
markets,' said Adrian Darley, who helps to manage 10 billion
euros in European equities at Gartmore Investment Management.
About 500,000 Germans bought their first stocks last year,
boosting the number of shareholders in the country to a record 5
million, according to Deutsches Aktieninstitut, which monitors
share ownership.
Stocks Over Bonds
Throughout Europe, investors put more money in stock mutual
funds than bond funds for the first time last year, according to
J.P. Morgan Securities Ltd. The change occurred as government
bonds fell across Europe and the Bloomberg European 500 Index,
comprising Europe's 500 most valuable listed companies, rose 33
percent in 1999.
The deadline for applying to buy Infineon shares is today
and they'll be priced Sunday. The shares begin to trade Monday on
the Frankfurt and New York stock exchanges.
Deutsche Bank AG and Goldman Sachs Group Inc. are managing
the sale with a dozen other banks.
Demand for the Infineon sale outstripped the amount of shares
available by 30 times earlier this week, said the offering's
managers. Tullett & Tokyo International Securities Ltd., a London-
base broker, was selling shares as high as 94 euros today.
The top of the price range for Infineon's shares is 35
euros, indicating the stock will surge Monday. Even though
Infineon may become one of Germany's most valuable companies, the
shares won't immediately be included in the Dax index. That's
because its members are only reviewed once a year, said Uwe
Velton, a Deutsche Borse AG spokesman. The next review is Sept.
15 and candidates for inclusion should be known about eight
weeks earlier, he said.
Mobile-Phone Chips
Investors are hoping to benefit from the growing demand for
Infineon's semiconductors, chips used in mobile phones and
computers. Worldwide sales of semiconductors jumped 19 percent to
a record $149 billion last year, the Semiconductor industry
Association said. The hunger for Internet access and mobile
devices is expected to push chip sales up 20 percent in 2000 and
21 percent in 2001, the group said.
The demand for Infineon shares has led brokers in Germany to
establish special call centers.
``We're expecting an assault of phone calls on Monday from
shareholders wondering if they got shares or not,' said Andreas
Bartels, spokesman for Comdirect Bank AG, Europe's largest online
bank and a unit of Commerzbank AG.
Comdirect is benefiting from interest in shares by German
investors. Last year, Comdirect averaged 8,500 new customers each
month, Bartels said. In January, that number climbed to 19,000
new investors. Last month, it was 30,000.
The bank is hiring about 40 new employees a month to keep up
with swelling customer rolls. ``We can't grow fast enough.'
IPO Boost
Investors left without Infineon stock could try to buy
shares in T-Online International AG, Deutsche Telekom's Internet
unit, which will start selling shares April 3.
Lycos Europe could also benefit, said analysts. Bertelsmann
AG and Lycos Inc. will sell about 20 percent of their joint
venture to the public by July.
``There will be more and more new issues and more and more
new money chasing them,' Gartmore's Darley said.
Infineon is selling as many as 173 million shares, including
a 19 million over-allotment option for share underwriters.
The company said it will receive as much as 580 million
euros from the sale to use for expansion. It also pocketed 250
million from Intel Corp., which bought a stake earlier this year.
The rest of the money from the sale is going to Siemens AG.
The sale is a final step in Siemens' program to shed less-
profitable units that account for 15 percent of sales to better
compete with rivals, such as Philips. Siemens, which makes
everything from light bulbs to power plants, will use the
proceeds from the sales to strengthen its Internet technology and
process automation operations. |
