UPDATE 1-German online retailer Zalando picks banks for Q3 IPO

Wed May 7, 2014 1:05pm EDT

* Credit Suisse, Morgan Stanley, Goldman Sachs mandated - sources

* IPO could be Europe's largest tech debut since 2000

* Zalando hopes to benefit from buoyant equity markets

By Arno Schuetze and Alexander Hübner

FRANKFURT, May 7 (Reuters) - Europe's largest online fashion retailer, Zalando, has picked banks to organise a possible stock market listing in the third quarter, potentially Europe's biggest technology offering since Germany's T-Online debut in 2000, people familiar with the plans said.

The flotation, which could value the company at more than $5 billion, is being organised by Credit Suisse, Morgan Stanley and Goldman Sachs, the sources said.

Zalando on Wednesday reiterated it was constantly considering all options including an initial public offering (IPO) and declined to comment further. The banks declined to comment.

Zalando has said in the past that an IPO was a possibility but not an immediate priority.

It is hoping to take advantage of buoyant capital markets, which have encouraged Chinese e-commerce juggernaut Alibaba IPO-ALIB.N to launch its own IPO later this year, possibly the largest technology debut in history.

Global initial public offerings have almost doubled in value in the first quarter of 2014, with Europe leading the way thanks to a nascent economic recovery that lifted investors' confidence and stock markets.

Investors have, however, in recent weeks embarked on a sell-off of high-flying tech stocks like Twitter and Amazon, reviving doubts about soaring tech valuations.

Zalando's biggest investor, Swedish firm Kinnevik , has said in the past its 36 percent stake in Zalando was worth 12.14 billion Swedish crowns ($1.87 billion), putting a value of 3.8 billion euros on the whole company.

Berlin-based Zalando, whose rivals include Britain-based ASOS, started selling shoes in Germany five years ago and now ships 1,500 different brands to customers in 15 countries.

Shares in ASOS have tumbled in recent weeks after it reported slowing sales growth and a 22 percent fall in first half profit that reflected a step-up in its investment programme.

Kinnevik, which has said that a "long-term approach" to ownership was needed to guide a firm such as Zalando as it navigates through a relatively new and fast-changing industry, has seen its own shares tumble due to worries over its large exposure to Russia and slowing sales at Zalando.

German magazine Bilanz reported earlier on Wednesday that Zalando has chosen to list on US bourse Nasdaq. ($1 = 0.7177 Euros) ($1 = 6.4942 Swedish Crowns) (Reporting by Arno Schuetze and Alexander Hübner; additional reporting by Emma Thomasson and Mia Shanley; editing by Thomas Atkins and William Hardy)

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