Europe IPO hopefuls face narrow window to make sales pitches
By Kylie MacLellan, ReutersLONDON -- European companies looking to make their stock market debut have a couple of months to act before an uncertain economic outlook risks sidelining a recovery in new issues and an early Easter interrupts their sales pitch.
January 23, 2013, 4:39 pm TWN
Ebullient stock markets have so far this month encouraged around half a dozen firms in Europe to launch plans to float, seeking to raise more than US$3 billion in the first few months of the year.
But there are reasons on both sides of the Atlantic why those seeking to seize the moment will want to act fast, and certainly before stock markets close for Easter and many investors head off on holidays.
Parliamentary polls in Italy next month could put Prime Minister Mario Monti's reform program in doubt and put paid to the current calm in Europe's debt woes, and the U.S. body politic, still nowhere near a lasting budget deal to balance taxes and spending, is preparing to do battle again.
“The U.S. fiscal cliff revisit in February or March could cause some wobbles, and the Italian elections in mid-February could also cool things down, so if you wanted to get a sale away, then you would be looking to act now before the conditions change,” said Neil Wilkinson, European equities fund manager at Royal London Asset Management.
Europe's initial public offering (IPO) market, which has been struggling during the region's long debt crisis and sluggish economic growth, started to show signs of life in the final months of 2012 as confidence picked up.
On Monday, Russian trading venue the Moscow Exchange and British housebuilder Crest Nicholson announced plans to float, while German residential property group LEG was due to begin roadshows for its planned 1.4 billion euro (US$1.9 billion) listing.
“There is a finite window now for things to happen,” said one banker working in equity capital markets (ECM), the part of an investment bank that runs share sales including initial public offerings.
Most companies choose to launch listings after publishing their full-year results, but some advisors said getting those audited ready in time to complete the monthlong IPO process before the traditional Easter slowdown will prove a challenge.
This year Easter day falls on March 31 — only once in the last 100 years has it been earlier — and much of Europe will clock off for a long weekend.