Fewer European IPOs likely as economic woes bite

Companies raised €57.4bn from initial public offerings last year, up 16% on 2014

ABN Amro at €3.337 billion was the second biggest European IPO.

ABN Amro at €3.337 billion was the second biggest European IPO.

 

European companies raised €57.4 billion in 2015 from initial public offerings (IPOs), up 16 per cent on €49.6 billion raised a year earlier.

The latest IPO Watch survey from PwC shows the value of offerings rose on average by 27 per cent to €249 million as against €196 million in 2014. Overall, there were 364 IPOs across Europe, compared to 376 for the previous year and a high of 819 in 2007.

Some 14 IPOs raised more than €1 billion last year, the highest since 2007 when 18 €1 billion-plus IPOs occurred. Privatisations also featured highly with three out of the top five IPOs - those of Aena, ABN Amro and Poste Italiane - being state run companies sold to the private sector or a return of the company to public markets.

PwC said market volatility led to the postponement or withdrawal of 61 offerings last year, versus 49 in 2014. It said continued economic uncertainty will likely hinder activity during the first half of 2016

“As we start 2016, a cold chill has descended across pretty much every market globally – this is certainly a more complex climate to that of 2015 and indeed 2014. We rounded off last year with six bumper IPOs, which really saved the day from an annual IPO proceeds standpoint and actually took us to the highest IPO proceeds since 2007,” said Denis O’Connor, transactions services partner, PwC Ireland.

“This year, I would expect to see the number of companies coming to market to marginally decline, as investors continue to scrutinise investment opportunities and those that can wait, will wait. Having said that, I think 2016 proceeds will be bolstered by the continuing trend of mega deals -the too-big-to-miss-out sentiment - and that we will see a recovery towards the middle of the year. The effect on Europe of the expected election paralysis in the US market remains to be seen,” he added.

While London retained its leading position for IPOs by value, with 92 offerings raising €16.4 billion last year, proceeds from offerings that took place there fell by 16 per cent.

The largest Irish-related IPO last year was housebuilder Cairn Homes’s €400 million debut on the London Stock Exchange in early June. Lifesciences company Malin €330 million flotation was the largest offering to take place on the Irish Stock Exchange.

The top European IPOs last year

1) Aena €3.875bn

2) ABN Amro €3.337bn

3) Poste Italiane €3.058bn

4) Worldpay €2.913bn

5) AutoTrader €1937bn

6) Sunrise Communications €1.882bn

7) Cellnex Telecom €1.946bn

8) Amundi €1.501bn

9) Covestro €1.500bn

10) Deutsche Pfandbriefbank €1.086bn