The volume of Initial Public Offerings (IPOs) listing in Europe rose by 19% in the third quarter (July-September) compared with the same period a year ago, despite recent market volatility, according to the latest PricewaterhouseCoopers’ quarterly IPO Watch Europe survey. The survey, which tracks the volume and value of IPOs on Europe’s main stock exchanges, showed that London was again the largest market in terms of offering value and volume in the quarter, with 79 IPOs raising €6,354m compared with 77 IPOs raising €11,681m in 2006.
The largest IPO in the third quarter of 2007 was on the Prime market of Deutsche Börse, Tognum AG, a supplier of engines and propulsion systems, which raised €1,800m. The next four largest IPOs all listed on London’s Main Market. These were Guaranty Trust Bank, a Nigerian bank, which raised €558m, Alliance Bank JSC, a bank in Kazakhstan, raising €524m, Vimetco NV, an industrial and investment group focusing on aluminium, raising €428m and Third Point Offshore Investors Ltd, an investment company, raising €387m.
Overall in Europe there were 179 IPOs in the third quarter of 2007, an increase of 19% on the 151 in the same period in 2006. The total offering value of €12,767m was down 22% compared to the same quarter of 2006 which raised €16,348m. An element of the fall in total offering value is due to the size of the largest transactions, the average offering value of the top five IPOs in quarter three 2006 was €2,312m compared to €739m in the third quarter of 2007.
Denis O’Connor, Partner, Head of Transaction Services, PwC Ireland said:
“In what is traditionally a quieter quarter for IPOs, the number of companies listing in Europe has increased despite volatility in the market, however the notably lower volume and value of IPOs in September compared with the same month in the prior year may indicate a rise in investor caution in the equity markets as a result of issues affecting the global debt markets.”
The average offering value for European IPOs also dropped this quarter with €85m raised compared to €136m in the third quarter of 2006 and €131m in the second quarter of 2007.
London’s market share, measured by the number of transactions, has grown to 44% of all European IPOs in the third quarter of 2007 up from 40% in the second but down from 51% in the same quarter of 2006. Both market share and activity on London’s exchange-regulated AIM market have seen a decline compared to the same quarter last year, with their proportion of the IPO market falling to 31% from 44% in 2006 and to 56 IPOs this quarter from 66 in 2006.
The European markets continued to attract non-European companies this quarter and hosted 25 IPOs by international companies raising €2,731m compared to 19 raising €5,833m in the third quarter last year. London’s Main Market hosted seven non-European IPOs with companies from South Africa, Nigeria, Kazakhstan, Bahrain and Israel, raising €1,655m and 13 non-European IPOs were floated on AIM raising €958m. London continues to remain the key market in Europe for international IPOs.
Euronext attracted 34 IPOs this quarter, raising €1,969m, down from €2,519m in the same quarter of 2006 but up in volume to 34 from 25 in 2006. The largest IPO on Euronext raised €363m for Lehman Brothers Private Equity Partners Limited, an investment company.
The Deutsche Börse saw 13 IPOs raising €2,470m this quarter, a 32% fall from 19 IPOs in the same period last year but a significant rise in value compared to the €692m raised in quarter three of 2006.
The Nordic OMX exchanges saw a rise in both the number and value of IPOs in quarter three of 2007, hosting ten IPOs and raising €294m. This compares to six IPOs raising €85m in the same quarter of 2006.
The Borsa Italiana hosted nine IPOs during the quarter with a value of €938m which is a considerable increase from the same quarter in 2006 where three IPOs raised €142m.
An upsurge in activity was seen on the Warsaw Stock Exchange (WSE) where there were 27 IPOs raising €394m compared with 14 IPOs valued at €219m in the third quarter of 2006. WSE New Connect Exchange, Warsaw’s newest exchange that opened in August, hosted four of the 27 IPOs.
Denis O’Connor continued:
“While the IPO market is not booming right now, there is still a lot of corporate activity and the pipeline for the next six months is looking positive. The one category of IPO that has slowed is that of the classic, highly leveraged, private equity backed business that might have come to market but we are still seeing Irish companies acquiring overseas and other types of transaction such as reverse take-overs.”
The US exchanges saw growth in both volume and value of IPOs this quarter with 44 IPOs raising €8,402m compared to 32 raising €4,685m in the same period of 2006. The largest IPO of the quarter, hosted by the New York Stock Exchange (NYSE), was MF Global Limited, a worldwide broker of futures and options, raising €2,129m. The second largest was by VMWare Inc, a technology company which raised €702m on the NYSE.
IPOs on the US exchanges continue to be dominated by domestic companies however they also attracted eight international IPOs in the quarter raising €3,688m, including three from China and two from Europe.
ENDS
Notes to Editor:
1. For the full, detailed breakdown of IPO activity on the European exchanges, please contact Johanna Dehaene, PwC Ireland on email: johanna.dehaene@ie.pwc.com or tel: + 353 1 792 6547.
2. Previous IPO Watch Europe Surveys and annual reviews are available here
3. About IPO Watch Europe
IPO Watch Europe surveys all new primary market listings on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the UK) on a quarterly basis. Investment-related companies’ listings are now included and figures for 2006 restated for comparison purposes. Movements between markets on the same exchange and greenshoe offerings are excluded. This survey was conducted between 1 July and 30 September 2007 and captures new market listings based on their listing date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers..
4. About The PwC Ireland Transaction Services Group
The Transaction Services Group is part of the Advisory practice of PricewaterhouseCoopers in Ireland. It comprises a core team of specialists who provide a broad range of services to companies and investment banks in connection with capital market transactions. These include preparations for becoming a public company, acquisitions, disposals and assisting with reviewing accounting policies and GAAP conversion projects, advising on regulatory issues and undertaking financial and business due diligence investigations.
5. About PricewaterhouseCoopers
The member firms of the PricewaterhouseCoopers network provide industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 146,000 people in 150 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice. PricewaterhouseCoopers in Ireland has 91 partners and 2,000 people.
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