European IPO market looks like global leftovers
LONDON, July 12 (Reuters Breakingviews) – Europe increasingly looks like a contender in the global competition for IPOs. A series of companies recently canceled their European debuts. More connected groups like Soho House, Turkish e-commerce company Hepsiburada (HEPS.O) and Italian vaccine vial maker Stevanato (STVN.N) have meanwhile chosen to migrate across the pond. . A vicious circle is forming.
French parcel delivery company Colis Privé, backed by Amazon.com (AMZN.O), postponed its IPO on Monday, blaming market conditions. Livestock health firm Huvepharma canned its € 4 billion bid in June, saying it was better in the barn for now. Chemical company BASF (BASFn.DE) has also suspended the list of its energy activities, saying the market is underestimating oil and gas assets. French auto parts distributor Parts Holding Europe (known as Autodis) and $ 2 billion logistics operator Primafrio have also withdrawn their agreements.
It is true that a few companies in more connected sectors, like the Spanish renewable energy company Acciona Energia (ANE.MC) and Believe (BLV.PA), a French billion dollar digital music company, have withdrawn their lists, but had to fix their prices projected price brackets. Overall, European companies had a decent first quarter, selling $ 25 billion in shares, but momentum fell to just $ 19 billion in the last quarter, according to Refinitiv.
Hotter debuts simply jump in New York, such as $ 4 billion Hepsiburada and $ 7 billion Stevanato. Despite the threat of a currency crisis at home, Hepsiburada jumped 12% in its debut. Membership Collective Group, parent company of Soho House, which British chic Nick Jones founded in London, is also heading to the Big Apple.
Years of poor secondary market performance may explain investor ambivalence. The Renaissance IPO Index, measuring consecutive performance over two years after listing, shows an increase of around 230% for US IPOs, compared to just 125% for listings in Europe, the Middle East and Africa over the past few years. last five years. Improving post-IPO trading, perhaps spurred by trending tech stocks, has deepened the pool of investor capital in the US relative to Europe, which also suffers from a relatively weak economic outlook.
The danger for European capital markets is that this trend becomes self-fulfilling, especially for high-growth e-commerce, tech or biopharmacy companies. The short-term remedy is for European companies to lower their valuations to persuade more skeptical investors to join us. But the prospect of leaving money on the table will, in the longer term, send those who can hurtle down the Atlantic.
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– The French parcel delivery company Colis Privé announced on July 12 that it was postponing its initial public offering for a few months, initially planned for early July, citing unfavorable market conditions.
– Italian group Stevanato is seeking a valuation above $ 7 billion in its IPO in the United States, the manufacturer of glass vials for Covid-19 vaccines and other health products said on July 7.
– Animal health company Huvepharma withdrew its IPO on June 30. Managing Director Kiril Domuschiev said the comments from investors made it clear that the company’s growth trajectory “would be best supported by remaining private for the time being.”
– Global IPO proceeds rose 131% in the second quarter to $ 79 billion from a year earlier, according to Refinitiv data through June 18.
Editing by Rob Cox, Oliver Taslic and Karen Kwok
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