LONDON Wolfgang Ziebart, Infineon Technologies AG chief executive, told journalists that, “Germany is not the preferred location for an IPO,” as he introduced memory subsidiary Qimonda.
Qimonda AG (Munich, Germany) will start out as Infineon’s wholly-owned memory subsidiary on May 1, before being spun off from its parent. Ziebart, speaking during a webcast press conference from Munich held to introduce Qimonda argued that a Taiwan listing would make more sense than a German one.
Ziebart went into some detail about Infineon’s thinking on an initial public offering of shares in the memory company, but also repeated many times that while an IPO remains the favored option a decision has yet to be taken by the Infineon supervisory board. Because of this there could therefore be no indication of timing for the IPO. Previously Infineon had said that an IPO was expected to take place in the second-half of 2006.
Ziebart discounted Germany as a location for a listing saying that there are no similar companies to Qimondo listed on German markets. Ziebart then used the same logic to speak in favor of a listing in Taipei, Taiwan, where a number of memory manufacturers are either already listed or are planning IPOs. He said that having a number of similar companies listed would favor fair comparisons by brokers.
However, Ziebart’s arguments are at odds with a report that surfaced in German media on Thursday (March 30) which suggested that shares in the new company would be traded in New York, either on the New York Stock Exchange, where Infineon is listed, or on Nasdaq.
Ziebart also explained how getting the maximum return for shareholders was driving Infineon’s thinking. “We do not believe we will generate more value by merging Qimonda with another memory company, nor by a share split, where each holder of an Infineon share receives a Qimonda share,” Ziebart said. “That is something other companies have done, but it would result in Qimonda being listed in Germany,” Ziebart added.
When asked what Infineon would do with the money raised by an IPO, Ziebart stressed that any such proceeds would be used to strengthen both Infineon and Qimonda. “We want to create two sound businesses.”
When challenged on the fact these businesses would each be half the size of Infineon and could lack critical mass, Ziebart said: “Size in itself is not a target for us; profitability is the target. Forget growing to try and get profitable. You can only grow when you are profitable.”
Ziebart said that Infineon has no plans to split off any other portions of its business. “At present, no further carve-outs,” he said.