Card retailer Moonpig soars 25% after pricing $1.64 billion London IPO

LONDON (Reuters) - Online greeting card retailer Moonpig saw its shares rise by 25% within minutes of pricing its London initial public offering (IPO) on Tuesday, underlining bullish investor appetite and setting the stage for other e-commerce companies to follow.

Stock in the newly listed firm was trading at around 440 pence per share shortly after floating at 350 pence on Tuesday. The listing price valued the company at around 1.2 billion pounds ($1.64 billion).

The deal, the second largest UK listing this year after Dr. Martens’ debut last week, sees the company sell around 5.7 million new shares and existing shareholders sell 134.6 million shares, setting the deal size at 491.2 million pounds.

It represents around 41% of Moonpig’s issued share capital on admission.

Like many other online retailers, Moonpig has seen its sales soar during the pandemic.

“This is a business with high margin and cash flow and a 65% market share in online cards in the UK at a time when COVID-19 has accelerated the trend of buying cards and gifts online,” said a source familiar with the deal.

“It is also a high growth area - online cards and gifts are an earlier stage in the cycle, with online cards only about 10-15% of the market so far compared to 25-30% in the fashion sector,” the source added.

Moonpig is among the first of several companies eyeing a stock market listing in Europe this year.

In London, Deliveroo and Darktrace are expected to complete deals this year, while in Europe, Germany’s Auto1 is on track for a listing.

A number of other firms such as WeTransfer in Amsterdam and Trustly in Stockholm also have IPO aspirations, boosted by increasing investor appetite for stocks showing strong potential for growth in an uncertain global economic environment.

Citi and JPMorgan were joint global coordinators and joint bookrunners on the Moonpig offering, along with HSBC, Jefferies and Numis.

Moonpig’s selling shareholders include a host of private equity firms including GoldPoint Partners and Exponent, as well as Hampshire County Council.

Reporting by Abhinav Ramnarayan; additional reporting by Stefano Rebaudo; editing by Sinead Cruise and Jason Neely