The acceptable performance of the stock market – although the Ibex has been down for six weeks, rising 14% in twelve months –, the search for capital now that financing is complicated by the increases in interest rates and the desire to give a new promotion of family businesses or ownership of investment funds have reactivated IPO projects. At the moment they are only plans with an eye toward 2024, but they already represent at least progress after two years of drought in stock market debuts.
“We have not seen the interest that exists in recent months for a long time,” says Javier Fernández-Galiano, director of Financial Advisory at Deloitte, assessing this trend. “In the pipeline there are family and private equity companies, and from practically all sectors of the economy,” he indicates. As he says, “there are various IPO projects being prepared,” although “most of them still have several months left to debut.”
Of the names that are heard, some arouse great expectation, such as the beauty and fashion group Puig, with brands such as Carolina Herrera, Paco Rabanne or Jean Paul Gaultier, which however is considering a more long-term decision. “The stock market is just one of the future options that we consider,” its executive president, Marc Puig, stated a few days ago in an interview with La Vanguardia. Investment banking sources place the value of an eventual public sale offer (IPO) at between 8,000 and 10,000 million euros.
Aside from Puig, the IPO plans have dozens of investment banks and law firms in motion. Bergé has hired Lazard for a possible placement of part of its automotive subsidiary Astara, valued at 2,000 million, while the tourism platform Hotelbeds, owned by the Cinven and CPPIB funds, is working with Morgan Stanley and Evercore in search of different options.
There are other cases, such as that of the American fund Blackstone, which has met with investment banks to explore a possible IPO of the Cirsa gaming group, purchased in 2018 from Manuel Lao. The airline Volotea is allowing itself to be advised by Morgan Stanley and Barclays to test the waters and gauge its stock market takeoff.
KPMG notes an increase in the number of clients interested in the option of going public. “Both the volatility indices, which have been low and stable for several months, and the main stock indices, which have experienced increases so far this year, suggest a much more favorable environment for new issuers than has been the case in a long time,” says Noelle Cajigas, partner responsible for Deal Advisory at KPMG in Spain.
However, Cajigas appeals for caution. Advisors observe the successful cases of IPOs in other markets, but also the opposite: sometimes the stock market performance has not been as expected, which “demotivates” investors. “Not all sectors have the same opportunity for a good reception,” he adds.
Salvatore Branca, head of Equity Capital Markets at BNP Paribas in Iberia, agrees that “in the short term there will be a rebound in IPOs.” It alludes to two causes. The first: “Never in the last two decades have there been so few new contributions” as in the last two years. “Now we will begin to see, among others, that operations are reactivated that do not respond to a sudden need for capital, but that have been in preparation for many months and were simply waiting for market conditions to be more favorable,” he says. The second cause is “greater macro certainty and stability.”
This year the drought of IPOs has become evident, not only due to the lack of debuts, but also because the only company that debuted last year, Opdenergy, has been the subject of a takeover bid by the Antin fund that will end up taking it out. From the market. The last really relevant IPO in recent years has been that of Acciona Energía in 2021.
Projects to be listed are not exempt from uncertainty or last-minute surprises, and a good example is Cosentino, which was preparing its IPO at the beginning of the year, suspended when several rulings on silicosis were known. “There is no urgency or need,” the company now says when asked about this matter. However, there are cases of companies that could advance their listing projects, such as the Basque aviation engine manufacturer ITP, owned by the Bain fund and in which Indra has a stake. The good momentum of the defense business could encourage it to launch its IPO at the end of 2024.
Could new tensions in the Middle East derail plans? “It is essential to remain vigilant and not lose sight of the risk of a regional escalation, but if the conflict is contained to its current extent, capital markets should continue to function normally,” says Branca from BNP Paribas.
From Deloitte, when Fernández-Galiano is asked about the risks, he cites the worsening of geopolitical tensions and a rise in oil prices that causes a rise in inflation.
