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(Bloomberg) — A series of stock debuts led by Athens International Airport SA will inject momentum into Europe’s dormant public market.
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In a first sign of activity, the company plans to raise more than $1.6 billion in combined initial public offerings after posting the lowest returns for a European listed stock in at least a decade in 2023. The trading debuts of Athens Airport, as well as Cyprus defense company Teon International PLC, German military transmission maker Lenk AG and Kazakh airline Air Astana, are a good sign of investor appetite as European stocks near records. It will serve as an indicator.
The timing is good for an IPO. Geopolitical tensions are pushing European defense stocks higher, while travel and leisure are catching up as the pandemic slumps. However, not everything was rosy. Athens Airport’s pricing was at the high end of the range, raising around 785 million euros ($843 million), while Theon’s was at the bottom.
“The market is becoming increasingly patchy,” said Evgenia Molotova, senior investment manager at Pictet Asset Management. “Athens airport should have a positive correlation with the resurgence of euro tourism,” he said, but Renault SA withdrew its electric vehicle division Ampere’s proposed IPO “due to more negative sentiment around EV demand.” He pointed out that he did.
Athens Airport will be the largest IPO in Greece in more than 20 years, and Teon will be the first new public offering in Amsterdam in more than a year. Lenk is set to begin trading on Wednesday after shareholder Triton sells its shares through an IPO, expanding the offering to 500 million euros. The last major IPO in Europe was that of Schott Pharma AG & Co. KGaA in September, a deal that raised €935 million, making it Germany’s largest IPO of 2023.
Companies raised just about $14 billion through initial public offerings on European exchanges last year, down 35% from the roughly $22 billion raised in 2022, according to data compiled by Bloomberg. The amount raised in 2023 was the lowest for the market in at least a decade, and was only a fraction of the more than $90 billion raised in 2021.
“The pendulum is swinging again to find cheaper sources of capital,” said Emmanuel Valavanis, senior equity sales at Mirabeau Securities. “If you have a heavily asset-based business, it makes sense to use that asset base to increase equity and reduce debt. The problem is that equity investors don’t buy into such deals. I wonder if he will embark on it.”
–With assistance from Michael Msika.
(Added details about Renk offer increase in 5th paragraph)
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