Galenica, Gestamp IPOs could pave way for European floating bonanza
April 19, 2017
The start of 2Q heralded two major IPOs in Europe. Swiss pharma company Galenica Santé (SIX: GALE) raised CHF1.9 billion (€1.78 billion), while Spanish car parts maker Gestamp Automoción (BME: GEST) floated at a value of €3.2 billion, per The Financial Times.
These deals could be indicative of a comeback for public listings in Europe after a slow 2016. Last year saw 199 completed IPOs for European companies worth almost €29 billion, the lowest volume and value figures since 2013, per the PitchBook Platform.
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To a degree, this is being driven by lower market confidence in the UK. The uncertainty caused by the referendum on EU membership and the subsequent triggering of Article 50 has resulted in a "wait and see" environment in Europe’s largest IPO market. Indeed, the UK represented around 30% of all European IPOs between 2013 and 2014; in the following two years, the UK mustered just over 20%.
Yet there is hope that the current pipeline of European companies will help steer the numbers back up in 2017. Swedish music-streaming company Spotify, for example, is reportedly planning to float this year—though by a direct listing and not an IPO—while other European tech companies including BlaBlaCar and Deliveroo have also been tipped to list. Government disposals could further fuel the pipeline, with Ireland looking to sell a 25% stake in AIB, the bank it saved in the aftermath of the financial crisis.
And despite the Brexit uncertainty, cautious optimism might not be misplaced, with reports that Blackstone is looking to list warehouse company Logicor on the London Stock Exchange in the first half of 2017, in a potential eleven-figure deal. After a slow start, Europe could be set for a memorable year for IPOs.