Legrand leads French IPO pipeline

After a fairly quiet start to the year, bankers in Paris are finally seeing the prospects of significant ECM deals. Last week’s rumours surrounded three deals in particular, of which the highest profile is the IPO of electronics company Legrand.

The company filed its preparatory documentation with the AMF last week and the analysts’ meeting for the IPO also took place last week, implying pricing in mid-April. The deal has been estimated at anywhere between €1bn and €1.8bn for a stake of around 20%–25%.

Selling shareholders are private equity firms Wendel Investissement and KKR, and the bookrunners are BNP Paribas, JPMorgan, Lehman Brothers and Morgan Stanley.

As happened with the IPO of Eutelsat late last year, the Legrand deal has the potential for some controversy if the sellers take a tough line on valuation. Bankers have already drawn attention to the fact that the IPO fees are heavily weighted towards the discretionary side, being 1% base plus 2% discretionary, but the latter portion is also linked to the difference between final pricing and the valuation pitched by the bookrunners.

Following a beauty parade, the IPO of alternative telecoms company neuf cegetel is rumoured to have been mandated, with BNP Paribas, JPMorgan and Goldman Sachs thought to be lined up for the deal. The mandate will be formally decided at a meeting on March 15. BNPP and Goldman are among the 10-strong shareholder group.

Finally, a beauty parade finished last week for the privatisation IPO of airport operator Aeroports de Paris (AdP). Calyon, HSBC and Morgan Stanley have already been appointed as advisers on the deal, but last week’s process was to finalise the bookrunner roles. All three advisers are considered to have strong chances of also being bookrunners, but it is thought in the market that the government might be looking for a fourth firm to join the list.

The analyst presentation for the deal is rumoured to be coming in mid-March, suggesting that the IPO is still on target for the first half of the year. The deal size has previously been estimated at €1.5bn.