September 24, 2019 / 12:40 PM / a month ago

EQT's stellar debut brings hope to battered European IPO market

LONDON (Reuters) - Shares in Swedish buyout firm EQT AB EQTAB.ST rose 25% on their market debut in Stockholm on Tuesday, adding nearly 1.5 billion euros to the company’s market value within minutes and reviving sentiment toward Europe’s battered IPO market.

EQT priced the much-anticipated initial public offering on Monday at 67 Swedish crowns ($6.89) per share, toward the top end of price guidance, after receiving enough orders to cover the 12.8 billion Swedish crown ($1.32 billion) deal 10 times over.

That gave the company a market capitalization of around 63.8 billion Swedish crowns, the equivalent of 6 billion euros.

The shares began trading at 80.50 Swedish crowns and were around 84.5 Swedish crowns by 1230 GMT, boosting the market cap to around 80 billion Swedish crowns, or around 7.5 billion euros.

The eye-watering rise is at odds with the performance of U.S. rivals such as KKR and Carlyle that have underperformed the broader S&P Index over the past five years.

“The offering attracted strong interest from both Swedish and international institutional investors as well as the general public in Sweden,” the company said in a statement.

The deal could encourage other European IPO hopefuls to push forward with listing plans in what has been a challenging year for equity raising in the region.

“What this deal tells you is that there is tremendous appetite for growth stories in the current market, especially given the sort of low-growth world we seem to be heading into,” said one of the lead managers on the transaction.

“Not every company out there is an EQT but there are a few hopefuls that can be encouraged by this,” he added.

European IPO volumes in the first half of 2019 were the lowest since 2012, while there have been some high profile deal cancellations globally as well.

Earlier this month, WeWork owner The We Company postponed its IPO, while sources told Reuters that Saudi Aramco’s local listing — which was expected to be the biggest listing so far this year — is now unlikely to happen this year.

However, AB InBev (ABI.BR) this week completed a reconfigured version of a Hong Kong listing of its Asia-Pacific unit, raising about $5 billion.

EQT launched the offering of a 20% stake earlier this month at a price range of 62-68 Swedish crowns. It received enough orders to cover the deal within two hours.

JP Morgan and SEB were global coordinators and joint bookrunners along with Goldman Sachs, Morgan Stanley, Nordea and UBS.

Reporting by Abhinav Ramnarayan, Additional reporting by Izabela Niemiec in GDYNIA, editing by Sinead Cruise and Kirsten Donovan

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