A year of two halves - 2014 European IPOs reach levels last seen in 2007, despite increasing investor fatigue in the second half of the year

Published at 10:39 AM on 11 December 2014

 

  • European IPOs in the 11 months ended November 2014 (“YTD 2014”) raised over 80% more than the whole of last year, with 344 companies raising €48.8bn compared to €26.5bn in 2013.
  • In London, 122 IPOs collectively raised €18.9bn in YTD 2014, representing a 31% increase in proceeds raised compared to 2013.
  • We expect that FY 2014 European IPO proceeds will reach €50bn, with Q4 2014 rounding out the year with c. €10bn in proceeds – making 2014 the most active year since 2007.
  • The pipeline for the start of 2015 looks solid with many companies looking to list pre the May elections.

PwC’s IPO Watch analysis has found that €48.8bn has already been raised so far on European equity markets in 2014, surpassing the combined money raised in the whole of 2012 and 2013, a total of €37.8bn. In October and November, 55 companies raised €8.5bn, an increase of 25% compared to the €6.6bn raised in the whole third quarter of 2014.   

The final quarter has been punctuated with a string of pulled or postponed IPOs, following the poor performance of some newly-listed companies and a spike in volatility at the end of Q3. Against this backdrop of more difficult market conditions, a number of IPO candidates chose to temporarily pause their process.  PwC has since seen a number of them successfully completing their IPOs including the delayed Virgin Money float which finally priced in November, albeit with a lower valuation than initially thought.

 

Mark Hughes, capital markets leader at PwC, said:

 

“The 2014 IPO market has been a year of two halves across Europe.  The start of the year was red hot with a flurry of activity. However, the second half has been overshadowed by investor caution spurred by increased market volatility, which has been the result of geopolitical instability in Ukraine and the Middle East and uncertainty surrounding economic growth in both China and Europe. Nevertheless, given the pipeline going into 2015, we anticipate the IPO window to open shortly after the holiday season as companies seek exits ahead of the UK general election in May.”

 

Vivienne Maclachlan, a director in PwC’s capital markets team, said:

 

“Possibly as a reaction to uncertain and slightly jittery markets, we have seen an increase in management and shareholders actively pursuing a dual track process – a sale and a float being run concurrently.  Although this dual track approach can put additional strain on management in what is already a pressured period, this affords shareholders optionality to maximise value on exit. In the second half of this year we have already seen a number of successful trade + secondary sales – perhaps also a reflection of the availability of cheap debt.”

 

The top five IPOs raised approximately 60% of the proceeds in October and November.  The IPO of hedge fund Pershing Square took on the mantle of the biggest deal of the year, raising €2.2bn in Amsterdam.  The venture incubator Rocket Internet raised €1.4bn in Frankfurt, reflecting renewed activity across European exchanges.

Whilst London has retained its position as the most active European market, representing 39% of the overall activity thus far, it did not feature a top five IPO this quarter and has hosted just three of the top 10 IPOs in 2014.

 No one specific sector has dominated the surge in IPO activity in 2014.  Financial Services, Retail and Industrials have all raised in excess of €7bn and going into the New Year, we would expect Retail activity to remain strong, particularly in London.

Top 5 European IPOs Oct/Nov 2014

Sector

Exchange

IPO proceeds

(€ million)

IPO proceeds

Incl greenshoe

(€ million)

Pershing   Square Holdings Ltd

Financial   Services

Euronext

 2,150

 2,165

Rocket Internet AG

Financial   Services

Deutsche   Börse

 1,400

 1,404

Entra ASA

Real   Estate

Oslo

 626

 626

Zalando SE

Retail

Deutsche   Börse

 526

 526

LIFCO AB

Health   Care

OMX

 414

 414

 

Top 10 European   IPOs YTD 2014

Sector

Exchange

IPO proceeds

(€ million)

IPO proceeds

Incl greenshoe

(€ million)

Pershing Square Holdings Ltd

Financial Services

Euronext

 2,150

 2,165

AA plc

Retail

London

 1,733

 1,733

NN Group NV

Insurance

Euronext

 1,540

 1,771

Rocket Internet AG

Financial Services

Deutsche Börse

 1,400

 1,404

B&M European Value Retail SA

Retail

London

 1,336

 1,456

Altice SA

Telecommunications

Euronext

 1,305

 1,501

Merlin Properties SOCIMI SA

Real Estate

BME

 1,250

 1,292

Applus Services SA

Industrial Goods &   Services

BME

 1,100

 1,210

ISS A/S

Industrial Goods &   Services

OMX

 1,098

 1,263

Kennedy Wilson Europe Real Estate plc

Real Estate

London

 1,017

 1,128

 

Top 5 London IPOs   Oct/Nov 2014

Sector

Exchange

IPO proceeds

(€ million)

IPO proceeds

Incl greenshoe

(€ million)

Virgin Money Holdings (UK) plc

Banks

Main

 399

 399

Jimmy Choo plc

Personal & Household   Goods

Main

 177

 194

Ediston Property Investment Co plc

Financial Services

Main

 121

 121

Fevertree Drinks plc

Food & Beverage

AIM

119

119

Gamma Communications plc

Telecommunications

AIM

 105

 105

 

Top 10 IPOs London   - YTD 2014

Sector

Exchange

IPO proceeds

(€ million)

IPO proceeds

Incl greenshoe

(€ million)

AA plc

Retail

Main

 1,733

 1,733

B&M European Value Retail SA

Retail

Main

 1,336

 1,456

Kennedy Wilson Europe Real Estate plc

Real Estate

Main

 1,017

 1,128

Lenta Ltd

Retail

Main

 696

 712

Saga plc

Retail

Main

 678

 678

SSP Group Ltd

Travel & Leisure

Main

 606

 697

Pets at Home Group plc

Retail

Main

 589

 589

TSB Banking Group plc

Banks

Main

 569

 626

AO World plc

Retail

Main

 513

 590

Poundland Group plc

Retail

Main

 451

 518

 

Notes to editors:

 

  1. IPO Watch Europe surveys all new primary market equity IPOs above €5m in value on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Hungary, the Netherlands, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey and the UK) on a quarterly basis. Movements between markets on the same exchange and greenshoe offerings are excluded.
  2. This survey was conducted between 1 October and 30 November 2014 and captures new market IPOs based on their trading date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.

 

About PwC

 

PwC helps organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com

 

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

© 2014 PricewaterhouseCoopers. All rights reserved.


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About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. © 2016 PwC. All rights reserved

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