IPO Watch positive

PricewaterhouseCoopers latest IPO Watch Europe survey, tracking volume and value of IPOs on Europe’s main stock exchanges, shows a continuing recovery in the IPO market in the first quarter of 2004. There were 56 IPOs between January 1 and March 31, a significant increase on the 15 recorded in the same period of 2003.

Pricing is increasing. The total offering value of IPOs in the first quarter was €5,240m, an increase on last quarter’s figure of €2,628m raised from 73 IPOs. This increase is explained by the high value IPO of Belgacom (€3,290m on Euronext) that accounted for 63% of the total offering value on all exchanges in the quarter.

Tom Troubridge, head of PricewaterhouseCoopers London Capital Markets Group, said: “The pipeline for the next two quarters looks promising, but investors remain selective. As the pulling of two technology IPOs in Germany may have shown, it is perhaps too early to bring companies to market that are not generating strong cash flow and paying dividends. It seems the dotcom boom of a few years ago has left a bad taste in the mouth of investors who are less interested in companies approaching the main equity markets that are at an early stage in their development. AIM continues to be active and offers a market for earlier stage companies.”

In terms of number of transactions, London continued to dominate increasing its market share of all IPOs to 70% by number, up from 61% last quarter and 53% a year ago. In total, London had 39 IPOs with a total value of €1,116m. The majority of these were listed on the smaller companies market AIM.

Dublin experienced its first IPO since 2001 with Eircom raising €296m, the second largest IPO in Europe this quarter with a dual listing in London. Eircom is backed by Sir Anthony O’Reilly, Providence Equity Partners, Soros Private Equity Partners, Goldman Sachs & Eircom’s Employee Share Ownership Trust Centre for Enterprise and Innovation (CEI), Southhampton Oceanography Centre (SOC), IP2IPO and SULIS University Challenge fund. Other private equity backed businesses that managed IPOs this quarter include Portuguese media company Media Capital backed by Hicks, Muse, Tate & Furst that raised €217m on Euronext and Industri Kapital’s Oriflame which floated in Stockholm – see EVCJ April exit news.