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Portugal healthcare firm IPO lacks lustre, but paves way for more
February 7, 2014 / 1:51 PM / 4 years ago

Portugal healthcare firm IPO lacks lustre, but paves way for more

LISBON, Feb 7 (Reuters) - Portuguese private healthcare firm Espirito Santo Saude (ESS)raised 130 million euros ($177 million) in a stock market debut on Friday, pricing shares at the bottom of its target range but with enough demand to encourage more listings, analysts said.

The initial public offering (IPO), representing a 42.6 percent stake in ESS that can be increased to 49 percent via options, was the second in as many months in the bailed-out southwest European country.

In December, postal service CTT broke a five-year IPO drought in Portugal following its debt and economic crisis with a 580 million euro privatisation of state assets via a share offering.

ESS shares IPO-ESS.LS were priced at 3.2 euros apiece - the bottom of an offer range which went up to 3.9 euros, meaning gross proceeds of 130.3 million euros, ESS said. The stock will start trading on the Lisbon stock exchange on Wednesday.

“The goal was to place the whole lot and that was achieved, so that, generally, is positive for the prospects of more IPOs, which can be expected as the economy recovers,” said Albino Oliveira, an analyst at brokerage Fincor in Lisbon.

Lisbon’s PSI20 stock index has gained more than 13 percent in the past year.

Portugal’s economy started to recover in the second quarter of 2013 and is expected to post its first full year of growth this year after the worst recession since the 1970s, while Lisbon is also preparing to exit its EU/IMF bailout in mid-2014.

“The fact that they didn’t raise more shows that there was a pricing problem more than a lack of appetite. But you also have to take into account that the offer follows a complicated start of the year due to the emerging markets turmoil,” Oliveira said.

The operation values the whole company, which owns and manages eight hospitals, seven outpatient clinics and two retirement homes, at 305 million euros.

ESS’ largest shareholder which will retain at least 51 percent of the company is Rio Forte, a unit of Grupo Espirito Santo group, which also owns the country’s second-largest listed bank, Banco Espirito Santo.

$1 = 0.7353 euros Reporting by Andrei Khalip; Editing by Mark Potter

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