Brexit, Trump victory did not discourage European IPOs, says Mergermarket

The Brexit vote and Donald Trump’s surprise US election victory did not discourage initial public offerings in Europe for long, according to analysts at Mergermarket, as several large companies floated in 2016.

Megermarket said even with large companies floating last year, market volatility did put some off so there could be a backlog companies listing in 2017.

With elections in Germany, France, the Netherlands, and possibly Italy, occurring during the year, and with that the US Federal Reserve hiked interest rates by 0.25% at the end of last year, “the IPO market looks primed for a first quarter rush”.

In the second of half the year deals raised €13bn, which was shy of the first half’s €13.6bn, despite only half as many listings completing, according to Mergermarket’s equity capital markets data.

It said that more funds would have been raised, if not for a series of cancelled and postponed flotations in the third quarter of 2016.

Nordic-payments firm Nets, German green energy business Innogy, Swedish plumbing and electrical tools wholesaler Ahlsell and Finnish telecomoperator DNA all floated last year, including medical products specialist ConvaTech which raised $1.08bn and was the biggest London listing in 2016.

Innology, which listed on the Boerse Frankfurt, raised the most on its IPO with €5bn, followed by Danish utility Dong Energy on the Nasdaq OMX Copenhagen, which raised €2.3bn.

However, software company Misys, automotive firm TI Fluid Systems and French optician chain Alan Affelou all backed out, but could float in 2017.

Mergermarket claimed that banks AIB and Credit Suisse Schweiz are preparing for IPOs, as well as Polich retailer Dino, warehouse firm LogiCor, communications infrastructure group Arqiva and German conglomerate Siemens’ planned public listing of Healthineers, its healthcare business.

The London Stock Exchange, including AIM listings, was the most attractive European bourse, with 43 IPOs, which was down by 12 from the previous year, with Nasdaq OMX First North in second with 22, followed by Nasdaq OMX Stockholm with 15. LSE has a €5.4bn offering size, which was down 62% from 2015.

In total European stock exchanges had 150 listings raising €26.7bn last year, with an 8% first day average return and a 12.2% one month average return.

About 35.5% of the companies’ listings were backed by private equity and 64.5% were not.

The telecommunications, media and technology (TMT) sector tied with the pharmaceutical, medical and biotech (PMB) industry with the most IPOs with 26. But the TMT sector had average offer size of €3.91bn, which was higher than the pharmaceutical sector with a €2.28bn average offer size.

In third place was the industrial and chemical industry with 20 IPOs with an average offering size of €2.09bn.