• 07-OCT-2014

  • By PwC

Choppy outlook for European IPO market

IPO Watch Europe Q3 2014 cov
• European markets were quieter than expected with the vast majority of the €6.6 billion proceeds being raised in July alone – but Q3 2014 proceeds were more than double those of Q3 2013
• In London, 23 companies raised €1.9 billion in the quarter, in line with the same period in 2013
• A number of large deals raised over €4.3 billion in the first few days of October, although performance was variable
• Proceeds for the last quarter of 2014 are expected to edge past the €15 billion raised in Q4 2013

Proceeds from European IPOs in the traditionally quieter third quarter settled back to €6.6 billion, from €22.3 billion in Q2 2014. Nevertheless, Q3 proceeds were more than double those of Q3 2013 (€3.0 billion), primarily as a result of a number of large IPOs in July, including NN Group in the Netherlands (€1.5 billion), FinecoBank in Italy(€673 million) and Logista in Spain (€606 million).

2014 IPO activity has almost quadrupled compared to last year. In the nine months to September 2014, €40.3 billion has been raised by 289 companies, in comparison to €11.7 billion from 173 companies in the same period in 2013.

Mark Hughes, partner in the UK Capital Markets Group at PwC said:

"The European IPO market performed strongly in the traditionally quiet third quarter against a backdrop of geo-political uncertainty in the Ukraine and the Middle East and, closer to home, the Scottish Referendum.

"Whilst we have seen a promising start to the final quarter with a number of large IPOs completing there are a number of warning signs on the horizon. However, if the markets continue to be receptive to IPOs, I expect the fourth quarter to surpass the €15 billion raised in Q4 2013."

The exchanges of London, Milan and Euronext accounted for the majority of proceeds raised in the quarter, together contributing over 70% of the total IPO proceeds in Q3 2014. Euronext saw eight IPOs raising €1.7 billion, with the largest IPO of the quarter, NN Group, contributing almost 90% of exchange proceeds. Milan raised €1.1 billion from 10 IPOs and London continued to be the busiest IPO centre in Europe with 23 companies raising €1.9 billion.

Financials dominated the quarter, contributing nearly half of the proceeds raised, with 14 companies raising €3.1 billion and four IPOs in the top ten.

Richard Weaver, partner and Head of the UK Capital Markets Group at PwC, said:

"The big story this quarter was one of demergers. NN Group, the Dutch insurance division spun out of ING Bank, was the largest European IPO, and we also saw listings of FinecoBank in Italy, Citizen Financials in the US and, in the previous quarter, TSB Bank here in the UK.

"These large and usually complex transactions have been primarily driven by regulatory requirements, and we expect this trend to continue."

Global IPO activity year to date stands at its highest level since PwC started publishing IPO Watch with €137 billion raised in 9 months. The US market led the field, reaching €28.7 billion in the quarter and €52.4 billion year-to-date, with the IPO of Alibaba being the largest on record raising €16.8 billion alone.

Notes to editors:

IPO Watch Europe surveys all new primary market equity IPOs above €5m in value on Europe's principal stock markets and market segments (including exchanges in Austria, Belgium, Denmark, France, Germany, Greece, the Netherlands, Ireland, Italy, Luxembourg, Norway, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Turkey and the UK) on a quarterly basis. Movements between markets on the same exchange are excluded.

This survey was conducted between 1 July and 30 September 2014 and captures new market IPOs based on their trading date. All market data is sourced from the stock markets themselves and has not been independently verified by PricewaterhouseCoopers LLP.

About PwC

PwC helps organisations and individuals create the value they're looking for. We're a network of firms in 157 countries with more than 195,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com

PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure​ for further details.