Shares of Samsonite International experienced a significant decline, dropping by as much as 12% to nearly a month’s low on the Hong Kong stock exchange after the luggage manufacturer announced its intention to pursue a dual listing.
The company, known for brands like American Tourister and Tumi, revealed its plan to seek a dual listing without specifying the exchanges involved, although sources familiar with the matter suggested that the U.S. was a probable venue.
Samsonite stated that the objective behind the dual listing was to enhance share liquidity and attract a broader investor base. However, the plan is still in its early stages.
Analysts expressed concerns about potential share dilution resulting from the move, leading to a negative market reaction. Shares tumbled by up to 12% following the announcement, with the stock trading close to 9% lower at HK$27.95 by midday.
Despite the immediate market reaction, Citi Research emphasized the long-term benefits of increased liquidity and expanded investor base. The research firm maintained a “buy” rating on Samsonite’s stock, highlighting its attractive valuation and the anticipated growth in travel demand driving luggage sales.
Samsonite’s decision to pursue a dual listing reflects its desire to reach investors in markets crucial for its global growth strategy. The company, founded in the U.S. in 1910, emphasized the importance of the Asian market and its commitment to further expanding its presence worldwide.
The announcement comes after Samsonite explored a potential take-private deal earlier in the year. However, the company’s board opted for a dual listing following a preliminary review of its strategic options.
While Samsonite did not confirm a U.S. listing, speculation suggests it could be a viable option. The company stated that it would provide further updates in compliance with applicable regulations.
Samsonite’s move is part of a trend among global brands considering additional listings beyond Hong Kong to diversify their investor base amid changing market dynamics. The decision reflects the company’s ambition to adapt to evolving market conditions while continuing to expand its business globally.
Since the beginning of the year, Samsonite’s shares have risen by 19.22%, driven by the recovery of tourism in Asia. As of Thursday, the company’s market capitalization stood at $5.69 billion.