11/04/2007 10:35

London hosts the top five IPOs in Europe this quarter

London continued to maintain its position as the number one destination for domestic and international companies seeking Initial Public Offerings (IPOs) in Europe, according to the latest PricewaterhouseCoopers LLP quarterly IPO Watch Europe survey, which tracks the volume and value of IPOs on Europe’s main stock exchanges. London’s Main Market hosted the top five largest IPOs of the quarter (January to March 2007) and all 15 non-European IPOs went to London.

The largest London IPO was by the Irish paper packaging producer, Smurfit Kappa, which raised €1,495m; followed by the largest domestic IPO, namely that of the British retailer Sports Direct International, which raised €1,384m. Two investment companies ranked third and fourth, 3i Infrastructure and BH Marco, raising €1,147m and €773m respectively, while in fifth place came the Russian oil and gas group Integra with €505m. PricewaterhouseCoopers IPO Watch Europe survey includes investment companies for the first time this quarter, along with restatements of the comparison periods of 2006.

Overall in Europe, there were 137 IPOs in the first quarter of 2007, 16% down on the 164 recorded in the same period in 2006 and some 52% down on the 288 recorded in the last quarter of 2006, which helped to make 2006 a record year. The total offering value of IPOs was €10,586m in the first quarter, a decline of 15% compared to €12,446m raised in the first quarter of 2006 and 70% less than the €34,954m recorded in the fourth quarter of 2006.

Tom Troubridge, head of the london capital markets group, PricewaterhouseCoopers LLP, commented:

“IPO activity was at a similar level to last year in this traditionally quiet first quarter, if you exclude investment companies which are in our statistics for the first time. Including investment companies, activity was down around 15%. London attracted the five largest IPOs in Europe this quarter, including the largest international IPO, Integra Group. Exchange regulated markets were less popular this quarter; AIM had half the number of IPOs over the same quarter in 2006 as investors continue to be cautious.”

In terms of offering value, London was the largest market this quarter raising €8,526m compared with €8,811m in the first quarter of 2006 and €15,303m in the fourth quarter of 2006. The decline in volume and value can be attributed to the slower activity on London’s exchange-regulated Alternative Investment Market (AIM). The average offering value of European IPOs raising new money rose to €93m in the first quarter of 2007, compared with €86m in the same period last year. However, it was 36% down from €138m raised in the last quarter of 2006.

London also continued to lead in terms of the number of transactions, with a combined market share for the Main Market and AIM of 43% of all European IPOs. However, its market share was down from 65% in the first quarter of 2006. Although AIM continued to drive activity by number, the IPO activity on AIM slowed by 49% when compared to the same period last year and by 54% over the fourth quarter of 2006.

The European markets remained attractive to non-European companies in the first quarter of 2007. There were 15 IPOs by non-European companies which all chose London as their destination and raised €2,471m in total. AIM attracted eight of them: two each from the USA, Canada, and the Cayman Islands and one each from Australia and British Virgin Islands. London’s Main Market attracted three IPOs from the British Virgin Islands, two from Russia and one each from the Cayman Islands and Barbados.

Euronext saw 25 IPOs raising €566m in the first quarter of 2007. This represents an increase of 25% in volume terms and a 29% rise in offering value. The largest IPO on Euronext was that of Outremer Telecom, which raised €118m.

The Deutsche Börse hosted 17 IPOs, which represented an increase from 12 in the first quarter of 2006, although the offering value decreased from €480m to €252m. This performance was significantly below that of the fourth quarter of last year, which saw 32 IPOs raising €2,997m.

No other European exchange raised significant amounts during the quarter, other than Oslo, where six IPOs raised €689m, making it the second largest market by value this quarter.

Tom Troubridge, head of the london capital markets group, PricewaterhouseCoopers LLP, added:

“Despite the slower start to 2007, the pipeline still looks good for the rest of the year with both domestic and international companies signalling their intention to IPO on Europe's exchanges. M&A activity continues to keep the markets active and should help ensure conditions remain favourable. As always, political events, particularly in the Middle East, remain a factor in the stability of markets looking forward.”

On the US exchanges the first quarter of 2007 saw an increase in IPO activity on the year on year comparison. Overall 64 IPOs took place compared with 56 in the first quarter of 2006. The total offering value decreased to €9,192m in the first quarter of 2007 from €9,939m in the first quarter of last year, an 8% decline.

The New York Stock Exchange hosted the largest IPO of the quarter, that of an investment trust, Currency Shares Japanese Yen Trust, which raised €1,244m. The second largest IPO was an advertising services firm, National Cinemedia, on NASDAQ which raised €605m. The third largest again went to NYSE where Fortress Investment Group raised €481m.

The US exchanges attracted nine international IPOs, three from China, two each from Israel and Greece and one each from Brazil and Philippines. In total they raised €1,374m.

1. For the full detailed breakdown of IPO activity on the European exchanges, with accompanying data tables and charts, please see the attached report ‘IPO Watch Europe
Survey Q1 2007’.

2. Previous IPO Watch Europe Surveys and Annual reviews are available at http://www.pwc.com/extweb/pwcpublications.nsf/docid/A691FB9A0C5158358025703D0054874F

3. About IPO Watch Europe

IPO Watch Europe surveys all new primary market listings on Europe’s principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, Holland, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Spain, Sweden, Switzerland, and the UK) on a quarterly basis. Investment-related companies’ listings are now included and figures for 2006 restated for comparison purposes. Movements between markets on the same exchange and greenshoe offerings are excluded. This survey was conducted between 1 January and 31 March 2007 and captures new market listings based on their listing date.

4. About London Capital Markets Group

The London Capital Markets Group is part of the Assurance practice of PricewaterhouseCoopers. It comprises a core team of specialists who provide a broad range of services to companies and investment banks in connection with all aspects of London capital market transactions. These include preparations for becoming a public company, selecting the right market and advisory team, assisting with reviewing accounting policies and GAAP conversion projects, advising on regulatory issues and undertaking financial and business due diligence investigations. The London Capital Markets Group is part of the PricewaterhouseCoopers global network of capital markets specialists.

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