(Reuters) – Amer Sports, the maker of the world-famous Wilson tennis rackets, is expected to return to the stock market later on Thursday after selling $6.3 billion worth of shares at a discount in its U.S. initial public offering .
The debut represents the second major test of investor interest in specialty retail stocks in recent months, following luxury sandal maker Birkenstock's disappointing debut late last year.
After a two-year dry spell, IPOs are expected to rebound in 2024 as speculation intensifies about a soft landing for the U.S. economy. But the recovery has so far been uneven.
Amer Sports, which owns a number of well-known sports brands including Arc'teryx and Salomon, sold 105 million shares at $13 each on Wednesday, raising $1.37 billion. It had previously given a range of $16 to $18.
China is nervous
Chinese company Anta Sports acquired Amer Sports in 2019 in a deal worth more than $5 billion. However, the China connection could also weigh on investor sentiment.
“Potential shareholders appear to be concerned that Amer Sports' growth opportunities will be unduly impacted by its reliance on demand from China and therefore may wish to lower the valuation,” said Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors.
The company generated 19.4% of its revenue in China in the first nine months of 2023, up from 8.3% in 2022, according to its prospectus.
Amer Sports also said it has key suppliers and manufacturing facilities in China and warned that escalating trade tensions could lead to future tariffs or other restrictions on its ability to sell goods it makes or sources in China to the United States sell.
“There are questions about whether they can maintain their pace of growth in developed and emerging markets. The 2024 Summer Olympics in Paris could help increase excitement,” Schulman added.
(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Maju Samuel)
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