(News Bulletin 247) – The European IPO market has recovered in the first six months of the year, supported by high indices and high expectations for rate cuts. What conclusions can be drawn from the largest operations of 2024 on European soil?

After a desert crossing of at least two years, the IPO market in Europe has gained strength in the first part of 2024. The ground has proven more favorable for this type of operation with indices at their highest and hopes of further interest rate cuts this year.

Thus, 69 companies have decided to take the plunge in the first half of 2024. This is 10% more than last year at the same time, notes EY in its latest report “EY Global Trends Q2 2024”. These same companies have thus raised 15.2 billion dollars since January, three times more than last year at the same time, again according to data compiled by EY.

This recovery was supported by “a stabilization of the economy in Europe, a drop in inflation, the decrease in energy prices, the increase in corporate profits and the strengthening of investor confidence”, quotes George Chan, specialist in the IPO market at EY.

“During the first half of the year, the consumer, financial, healthcare and life sciences sectors were the dominant sectors in Europe, with each of the sectors mentioned having been driven by a mega-IPO worth more than $2 billion,” the specialist continues.

Several major operations that had been put on hold in 2023 were indeed able to materialize in the first six months of this year. Among these companies, we can cite CVC in the Netherlands, Renk in Germany or Planisware in France which had to turn back at the last minute at the end of last year, faced with difficult market conditions. With the first half of the year having just recently come to an end, what assessment can we make of these newcomers to the European Stock Exchange*?

Among the biggest operations that animated the European IPO market in the first half of the year, we can mention the partial IPO of Athens International Airport, by the Hellenic State at the beginning of February. And demand was more than there for the partial privatization of the country’s most important airport, with an operation oversubscribed 12 times. After a sharp take-off in the first days of trading, the share has lost altitude and is trading almost 5% below its IPO price set at 8.20 euros.

A winning return to the stock market for Renk

German Renk also successfully crossed the stock market’s Caudine Forks, this time at the end of February. The German manufacturer of gearboxes for tanks has successfully returned to the financial markets, the group having already been listed from 1923 to 2020 in Frankfurt. The share price is around 25 euros, almost 70% above the IPO price set at 15 euros. Renk’s tenacity has therefore paid off, as the group had suspended its project five months earlier due to difficult market conditions.

Still in Germany, we can also mention the IPO of the German perfume and cosmetics group Douglas, better known in France for its Nocibé brand. To be more precise, this is, like Renk, a return to the stock market of the Douglas company. The company had been delisted from the Frankfurt Stock Exchange in 2013, after being bought by the investment fund Advent and the Kreke family. The group’s first steps were more complicated than expected. The stock closed well below its IPO price of 26 euros, which was already set at the lower end of the indicative range of up to 30 euros. Since its first inaugural steps, the stock has not been in good odour with the markets, since it has lost almost 35% compared to its IPO price.

Swiss neighbor Galderma followed suit on March 22. The dermatological care specialist set its price at 53 Swiss francs, which allowed it to raise 2.3 billion Swiss francs. This amount corresponds almost exactly to the total volume of the ten IPOs last year in Switzerland, notes EY Switzerland. This is the largest IPO in Switzerland since 2017, SIX, the Swiss stock exchange operator, said in a press release. And the results are rather flattering for the Swiss specialist co-founded by L’Oréal and Nestlé in the 1980s. It has gained nearly 40% since its entry on the Zurich Stock Exchange.

A month later, investors finally witnessed the first steps on the Amsterdam Stock Exchange of the investment fund CVC after two postponed attempts. The investment fund had thus managed to raise at least 2 billion euros, which at the time was the largest IPO on European soil since the beginning of the year. Like Galderma, the IPO of the owner of Panzani pasta was also acclaimed by investors, with the share price rising by a further 22.5% compared to its IPO price of 14 euros.

But the family fashion and cosmetics group, Puig – pronounced Poutch – came to steal the crown of the biggest operation on European soil. The Catalan owner of the brands Nina Ricci, Paco Rabanne and Jean Paul Gaultier also found favour with investors, and was able to raise 3 billion euros, based on an IPO price of 24.50 euros. This constitutes the biggest stock market launch of the year in Spain and one of the main ones in Europe. Since its inaugural steps, the share price has gained 6.5%. An honourable performance in a luxury market that has become more complex.

A French market that is quivering?

What about France? Two major operations have animated the Paris stock market in the first six months of 2024. The first being the software publisher for project management Planisware, which made a remarkable debut on the Paris Stock Exchange in mid-April. The group finally took the plunge six months after a first attempt that had been canceled due to adverse market conditions. Planisware’s patience has been rewarded, since the stock has risen by 65% ​​compared to a firm price of 16 euros retained for the operation.

At the beginning of June, it was the defense gem Exosens that made a remarkable debut on Euronext Paris. The specialist in electro-optical detection and imaging technologies also received a more than warm welcome on the stock market, and is still trading above the firm price of 20 euros set for this operation.

Like Plansiware in mid-April, Exosens has chosen the private placement route for this “express” IPO. The company has taken advantage of the recent relaxation of the rules governing IPOs. Companies wishing to join the Paris stock market are no longer required to reserve a portion of their shares for individual investors. Previously, they were required to offer small shareholders a minimum of 10% of the total amount of the transaction.

On the other hand, on the small and mid-cap side, no IPOs were recorded. However, it was this same segment of the market that had animated, if not saved, the IPO market last year.

*Courses set for 06/28/2024