By Robert Venes
LONDON, Feb 28 (IFR) - Dutch cable group Ziggo will
launch its long-awaited IPO tomorrow, with private equity owners
Cinven and Warburg Pincus targeting 600m-800m euros in an
The company is due to begin approximately one week of
pre-marketing tomorrow, Wednesday February 29, with pricing
following just a fortnight after launch. The accelerated
timetable is a result of looking at the relative health of the
US IPO market, where deals are only live for two weeks, versus
the closure of the European market in the second half of 2011.
Instead of two weeks of pre-marketing, where analysts visit
investors, followed by two weeks of bookbuilding and management
roadshows, each stage has been cut in half. Bookbuilding is due
to begin around Wednesday March 7, putting pricing around March
Cinven and Warburg Pincus were targeting a transaction size
of up to 1.25bn euros last year. Although comfortably bigger
than the largest IPO so far this year - the US$250m
quasi-private deal for RusPetro - that figure has been
substantially reduced to 600m-800m euros as part of a switch to
a more US-style approach, where the IPO is seen as an
introduction rather than the main liquidity event.
The theory is the stock then finds a level, brokers produce
independent research and then large staggered sell-downs follow
from the owners. Ziggo is the first name to try this approach so
it is no surprise that the private equity owners are selling
rather than the ideal of a primary share IPO.
Companies typically target a free-float of at least 25% at
IPO, but Ziggo has been given a dispensation to have a lower
free-float with a level around 15%-20% likely from provisional
There had been talk of interest from US billionaire John
Malone's Liberty Global to buy Ziggo, but those
involved suggested his time had passed. One banker involved said
there is no desire in the current market to waste investors'
time in launching an IPO that may end with the company being
sold. While there cannot be complete certainty a bid would be
rejected, he added, bankers have to be 90%-95% certain of
successfully taking an IPO to completion before pressing ahead.
Although DKSH, a Swiss-based Asia-focused outsourcing
business, is already in the market with a US$500m offering
running over four weeks, Ziggo is seen as the European IPO
JP Morgan and Morgan Stanley are joint global co-ordinators
and joint bookrunners. Deutsche Bank and UBS are also joint
books. ABN AMRO, HSBC, Nomura, Rabobank and Societe Generale are
co-leads. STJ Advisors is the independent adviser.