The proceeds raised from European IPOs in the third quarter (Q3) of 2024 fell by 92% compared to the same period last year marking it as the first this year to see a fall in IPO activity according to figures from PwC’s latest IPO Watch EMEA. Numerous elections across the region including in the UK, France and EU are believed to have caused companies to delay their listings.
Overall, Europe saw eight IPOs raising €0.3bn, a decrease of €3.3bn compared to the same period last year and a fall of €6.3bn compared to the previous quarter. However, year-to-date, European IPO proceeds are still outperforming last year with €11.8bn raised compared to €6.1bn at the same point in 2023.
Despite the quieter quarter in Europe three significant IPOs launched in Europe in September including the IPO of Springer Nature in Frankfurt (priced early October), Europastry on the Madrid Stock Exchange and the Zabka IPO in Poland. Reform of the EU Prospectus Regulations is back on the agenda in Europe with the same aim as the UK’s Primary Markets Effectiveness Review (PME) – to make Europe’s capital markets a more attractive venue by simplifying the regulations and increasing liquidity.
“Despite a quiet summer, the IPO market is currently being tested by a few large IPOs in Europe, three of which are private equity-backed, demonstrating continued sponsor appetite for IPOs,” said Vhernie Manickavasagar, Capital Markets Partner at PwC UK. “With a backdrop of stabilising equity capital markets and a significant backlog of maturing PE-backed investments, we expect to see increased IPO and follow-on equity issuance activity from the sponsors in 2025. The focus will be on achievable valuations and post-IPO performance.”
Springer Nature’s Frankfurt IPO boosts sentiment
Shares in Springer Nature opened in Frankfurt at EUR 24, which was a 6.7% mark up on where they had been priced. The publisher came to the market with a valuation of EUR 4.5bn. It was Germany’s first IPO in six months. The listing could encourage a number of other companies to move forward with their IPO plans in Frankfurt.
Springer and its capital markets advisors had set a price range of EUR 21-23.5 at the start of last week. The IPO order books were covered within 30 minutes of the market opening.
The listing brings Springer EUR 200m. The total offer size is expected to be around EUR 600m with the exercise of a so-called greenshoe option.
The majority shareholder, Holtzbrinck Publishing, is expected to hold 50.6% of the shares. Another existing shareholder, BC Partners, keeps 36%. Springer Nature said it planned to pay investors a dividend of EUR 25m this year. The company had previously planned to come to the market in 2020, but the plans were shelved due to the COVID pandemic.
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Seven & i Holdings to sell stake ahead of IPO
Japanese supermarket Seven & i Holdings said it was planning to IPO, but will sell a stake in the business ahead of the listing. The company owns and operates the highly successful 7-Eleven franchise in Japan, as well as the Ito Yokado grocery store business.
The timeline for the listing and the size of the IPO have not yet been revealed to the market, although management had previously indicated 2027 as the target. It is believed that Seven & i is contemplating a sale of part of the business to a fund.
Seven & i had previously rejected an acquisition offer from Alimentation Couche-Tard in Canada, arguing that the price was too low. Further details may be forthcoming at the company’s earnings call on 10 October (Thursday).
