TLG - Media, page-13695

European Companies Delay IPO Plans as Investor Concerns Grow
Jorge Diaz Oct 11 20223

European companies are facing delays in their plans to go public on local stock exchanges, as investors become increasingly cautious about market conditions. Planisware, a French software group, recently halted its plans to float on the Paris stock exchange, citing “extremely cautious” investors as the reason. Planisware’s IPO would have been the largest listing in Paris in two years. Similarly, German military contractor Renk and toll payments provider DKV Mobility have also put off their planned listings, further dampening Europe’s already struggling market for new offerings.

Investors’ concerns stem from weak macroeconomic data in Europe, which has raised fears of stagflation – a combination of stagnant growth and high inflation. The euro has weakened against the dollar and Germany’s industrial production has seen a sharp decline. The pessimistic outlook has led to one European banker expressing doubt that there will be any more listings this year. The delays have dealt a blow to Europe’s IPO market, which is now at its lowest level since the 2008 financial crisis.

The failure of these IPO deals also highlights broader issues with Europe’s IPO market. Craig Coben, former global head of equity capital markets at Bank of America, notes that the depth of local markets is a significant problem. European investors are reluctant to get trapped in illiquid stocks, particularly those of companies valued between €1 to €2 billion. Coben suggests that European equity markets do not have enough depth to sustain IPOs in this valuation range.

Meanwhile, the market for tech IPOs in the US appears to be faring better. German sandalmaker Birkenstock is set to go public on US stock exchanges, and chip designer Arm, which chose New York over London, enjoyed a positive first day of trading.

Sources: The Financial Times