TALLINN - The initial public offering of Ekspress Group that ended March 30 was heavily oversubscribed, with demand for shares of Estonia's leading media group exceeding supply by a factor of six. The final sales price was set at 92.3 kroons (5.9 euros), with 78 percent of the 6.1 million shares snapped up by institutional investors and the remainder by individuals.
Analysts said the robust demand had been expected since institutional investors, whose aggregate bids comprised 580 percent of the IPO's total offering, often bid for more knowing in advance the sale would be oversubscribed.
Still, they said the unfulfilled demand would push up the stock's price on the open market. Trading on the stock was expected to begin April 5.
More than half of the stock sold belonged to CEO Hans Luik, while the remainder will consist of new equity.
To be sure, the IPO offering 's a first for a major media company in the Baltics 's coincides with an exuberant advertising market.
Media analyst Toomas Leito was quoted April 2 as saying that a fresh study shows the combined advertising sales of Estonia's top five papers grew 40 percent in March compared to the same month last year.
"It was a fantastic month and a fantastic quarter, with excellent results," said Leito. "Such figures have never been seen before. The first quarter as a whole was splendid."
Still, the analyst warned that the party couldn't go on forever. "The advertising market cannot continue developing endlessly at such a pace," he said.
On March 30 the TNS Emor pollster released data showing the Estonian media advertising sector grew 32 percent in the first quarter of the year.
The largest growth year-on-year was seen in Internet and television advertising, while the gains in printed media were approximately 30 percent, the pollster announced.
The market was certain to cross the 100 million euro threshold this year and amount to more than 1.6 billion kroons by the end of the year, TNS Emor said.
In the Ekspress Group's IPO, a total of 32,909 shares were distributed between board members and employees of Estonian subsidiaries and affiliated companies, including 30,526 shares to board members and employees on the basis of preferential distribution.
The group, which was created in 1989, includes brand name publications such as Eesti Paevaleht, Eesti Ekspress and SL Ohtuleht. The group claims that some 60 percent of Estonia's population reads its publications.
The group's 2006 turnover amounted to 929 million kroons, while earnings reached 94 million kroons. The group employs nearly 2,000 people.
Ekspress executives said last month that part of the proceeds from the IPO would be used for expansion on the Latvian market, where the company is in negotiations with local media outlets.
They said that Ekspress Group would aim to take over a Latvian company via a share swap.
Luik also said in March the company was considering setting up business on the Romanian media market.
