CP SHIPS’ MILES KEEPS IPO OPTIONS OPEN

CP SHIPS’ MILES KEEPS IPO OPTIONS OPEN    Ray Miles, chief executive officer of CP Ships, said that the company will continue to consider opportunities for takeovers after its initial public offering later this year.
   CP Ships is now preparing a stock market listing for this fall, following the announcement on Tuesday made by its parent, the Canadian Pacific conglomerate, of a plan to spin off its five businesses into stand-alone, publicly-listed companies.
   Miles said that the strategy of CP Ships will not change, but its future stock market listing will provide “new ammunitions.”
   “Certainly, with our own equity, our currency, we may have the ability to contemplate transactions that would hitherto have been impossible,” Miles said. He commented that CP Ships is not frightened of becoming a takeover target, as a listed company. CP Ships will remain open to potential mergers or acquisitions if they enhance the value to its shareholders, he added.
   The spinning off of CP Ships transaction does not imply raising equity from the stock market, as existing shareholders of the CP group will automatically receive shares in the newly-independent companies. Miles said that the CP Ships and other businesses of the group were not being sold, but changes in shareholders are likely after the distribution of shares.
   CP Ships will appoint its own advisors about the future listing, scheduled in about October. The company has not decided on which stock exchanges it will be listed, but London, Far Eastern and North American exchanges are being considered.
   David P. O’Brien, chairman, president and chief executive officer of the CP group, said that the smaller companies within the group — such as CP Ships, Canadian Pacific Hotels and Fording — have not received the market attention they deserve under the current conglomerate structure. But O’Brien said that these companies “really are little jewels waiting to be discovered by investors” and CP Ships is “one of the most profitable if not the most profitable container shipping company in the world.”
   Miles would not comment on the potential capitalization of CP Ships. O’Brien said that the CP group may modify its plan in response to market conditions. For example, it may reduce the number of public companies if one of the smaller companies cannot attract sufficient investor following, he said.