CONTINUE TO SITE »
or wait 15 seconds

news

Should Starbucks be worried about Luckin Coffee IPO?


China's Luckin Coffee Inc., the growing rival to Starbucks in that market, is making its long anticipated debut in the U.S. financial markets, by announcing today the pricing of its initial public offering of 33 million American Depositary Shares at $17 per share, the high end of the range.

The company has granted underwriters an option, exercisable within 30 days from the date of the final prospectus, to buy up to 4,950,000 additional ADSs. The total net proceeds of the offering and the concurrent private placement to Louis Dreyfus Company B.V. are expected to be approximately $571.2 million if the underwriters do not exercise their option and approximately $650.8 million if the underwriters exercise their option.

It is trading under the ticket symbol, LK, on Nasdaq Global Select Market, according to a company press release.

Luckin, the 2-year-old startup that offers payment solely through its mobile app, claims that it will have 4,500 outlets across China by the end of the year. Starbucks CEO Kevin Johnson isn't worried, however, despite the fact that the Seattle-based company only has 3,600 locations.

Johnson, who took the reins in spring of 2017, told CNBC that Luckin's claim is "unlikely," noting his company's 18 percent growth in new China stores as of the fourth quarter of 2018.

"Just this last quarter we entered 10 new cities in China," he told CNBC, adding that Starbucks launches a store every 15 hours in China.
Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC, China International Capital Corporation Hong Kong Securities Limited and Haitong International Securities Company Limited are acting as book runners of the offering. KeyBanc Capital Markets Inc. and Needham & Company, LLC are acting as co-managers.


Keep up with what's happening in the restaurant industry

Subscribe now to the Restaurant Operator Daily, which brings you the top stories from Fast Casual, Pizza Marketplace, and QSR Web.

Privacy Policy

Already a member? Sign in below.

  or register now

Forgot your password?


You may sign into this site using your login credentials
from any of these Networld Media Group sites:

b'S1-NEW'