Sehr geehrte Damen und Herren, für Rückfragen zu der beigefügten Publikation PwC IPO Centre Q2 214 Equity Capital Markets Briefing stehen Ihnen folgende Ansprechpartner gerne zur Verfügung: Nadja Picard nadja.picard@de.pwc.com Tel. +49 211 981-2978 Christoph Gruss christoph.gruss@de.pwc.com Tel. +49 69 9585-3415 Dirk Menker dirk.x.menker@de.pwc.com Tel. +49 89 579-586 Armin Slotta armin.slotta@de.pwc.com Tel. +49 69 9585-122
PwC IPO Centre Q2 214 Equity Capital Markets Briefing PwC provides independent guidance to companies in the process of going public and to already listed companies in assessing their position in the equity capital markets. Martin Coenen martin.coenen@nl.pwc.com Clifford Tompsett clifford.tompsett@uk.pwc.com Nadja Picard nadja.picard@de.pwc.com Jan-Willem de Groot jan-willem.de.groot@nl.pwc.com
Overview Global Trends European Trends Case Studies Summary & dashboard The global IPO market continued its very positive start of the year Global IPO money raised was $74.8bn via 38 deals in the second quarter of 214, compared to $56.2bn via 21 deals in the second quarter of 213. Contrary to Asian equity indices, the Dow Jones and S&P 5 again reached alltime highs in the second half of June. Average global IPO returns remained strong at 26.2% in the first half of 214. boosted by a vivid European IPO market As IPO activity skyrocketed in June, Europe became the leading IPO region in the last quarter, accounting for 44% of money raised and 34% of global IPOs. With $32.7bn money raised from 16 IPOs, the European market strongly outperformed both Q2 213 ($7.bn; 38 IPOs) and Q1 214 ($16.4bn; 45 IPOs). and Private Equity firms seeing ample opportunities to exit via an IPO In the first half year of 214, PE-backed IPOs accounted for 35% of total number and 65% of money raised in the US. Europe as well showed strong momentum with 35% of total IPOs and 53% of total money raised via PE-backed IPOs Listed banks remain most active in tapping the equity capital markets Global follow-on (FO) activity during Q2 214 outpaced Q2 213 by 12% in number of deals, while the total amount of money raised was 24% higher. Financials represented 37% of total money raised via 385 transactions in H1 214. Favourable IPO climate strengthens pipeline Continued strength in the equities markets and decreased market volatility are also expected to support strong IPO momentum for the remainder of 214. 3 4 3 Money raised in the EU indexed on 1 year average IPO ( = $4.2bn) 4 55 Jan Monthly averages ($bn) 1. 23 Jan 147 189 153 2.2 276 4. 197 4.3 149 7.1 81 348 5.9 Feb Mar Apr May Jun 214 136 Feb Mar Apr May Jun 214 FO ( = $14.7bn) 4 3 4 3 72 62 Monthly averages ($bn) 11.1 95 Jan 1. 92 168 14.6 169 13 13 15.3 124 156 116 Feb Mar Apr May Jun 214 12.2 194 Jan Feb Mar Apr May Jun 214 Money raised in the EU indexed on same month average (1 year) IPO +391 491 +248 FO +94 The above June IPO index level of 491 implies an amount of money raised in Europe, which is 391% above the 1-year average +16 24.7 Note: The two indices on top are based on the 1Y rolling monthly average capital raised in European IPOs ($4.2bn) and FOs ($14.7bn). The two bottom indices are based on the same month rolling 1Y average capital raised in European IPOs ($5.9bn on average for June) and FOs ($24.7bn on average for June) Source: Dealogic as of 3 June, 214 3
Global capital market trends and developments Overview Global Trends European Trends Case Studies Strong European activity in H1 214 drives money raised via IPOs to highest level since H2 21 Global Summary Data Initial Public Offerings (IPOs) and Follow-ons (FOs) Summary Statistics 212 213 H1 213 H1 214 Q2 213 Q2 214 Number of IPOs 716 849 35 547 21 38 Money Raised in IPOs $14.5bn $194.3bn $88.7bn $125.4bn $56.2bn $74.8bn Average Deal Size of IPOs $196.2m $228.9m $253.4m $229.3m $267.6m $242.7m Number of PE-backed IPOs 14 173 69 135 39 88 Value PE-Backed IPOs $21.5bn $58.2bn $21.8bn $57.6bn $13.8bn $39.9bn Number of FOs 2,51 3,34 1,423 1,648 719 85 Money Raised in FOs $58.8bn $586.bn $39.1bn $329.3bn $155.bn $191.8bn Average Deal Size of FOs $23.5m $193.1m $217.2m $199.8m $215.6m $238.3m Pricing Date Issuer Name Top 5 Largest IPOs H1 214 Issuer Country Exchange Pricing 1 Money Raised ($bn) 22-Jan-14 HK Electric Investments HKEx Bottom of range $3.1bn 1-Mar-14 Japan Display Inc Tokyo Stock Exchange Bottom of range $3.1bn 9-Apr-14 Ally Financial Inc NYSE Bottom of range $2.6bn 23-Jun-14 AA plc LSE In range $2.4bn 21-May-14 JD.com Inc NASDAQ Above range $2.bn Pricing Date Issuer Name Top 5 Largest FOs H1 214 Issuer Country Exchange Deal Type Money Raised ($bn) 25-Jun-14 Deutsche Bank Deutsche Börse Acc. bookb./ Rights offer $9.2bn 4-Apr-14 BOE Technology Group Shenzhen Cash Placing $7.4bn 26-Mar-14 Lloyds Banking Group LSE Acc. Bookb. $6.9bn 29-Apr-14 Eurobank Ergasias Athens SE Acc. Bookb. $4.bn 22-Jan-14 Raiffeisen Bank Int. Vienna SE Acc. bookb./ Rights offer $3.8bn Highlights The total amount of money raised via IPOs in H1 214 stood at $125.4bn, which is the largest amount of money raised via IPOs since H2 21. Key drivers behind the strong IPO market are the increased European IPO activity as well as the substantial amount of PE-backed IPOs. PE-backed IPO activity almost tripled in terms of money raised relative to Q2 213, and more than doubled relative to Q1 214. FO activity saw a strong quarter as well. In terms of money raised, FO activity in Q2 214 was at its highest level since Q4 21. Global equity indices (213 214 H1 rebased to ) 16 15 14 13 12 11 9 Jan-12 Aug-12 Mar-13 Oct-13 May-14 FTSE Hang Seng Index S&P5 1) IPOs are classified as In Range if the IPO is priced in the middle 5% of the price range. The top and bottom 25% are classified as Top of Range and Bottom of Range Source: Dealogic, Bloomberg as of 3 June, 214 4
IPOs and FOs in leading capital market regions Overview Global Trends European Trends Case Studies Highlights General trends In terms of ECM activity, Europe was the leading region in Q2 214 with a total money raised of $99.5bn via 168 FOs and 16 IPOs. Almost 1% of the total money raised related to the FO of Deutsche Bank raising $9.2bn. Other banks executed significant FOs as well during Q2 214: Eurobank Ergasias ($4.bn), National bank of Greece ($3.5bn) and Banco Popolare ($2.1bn). In terms of IPO activity, Europe saw the strongest quarter since the financial crisis. Euronext, the pan European exchange operator, listed on its own platform late June, raising a total of $1.1bn (see case study slide 15). The exchange, which is now separated from ICE, saw a strong quarter with the listings of Elior ($1.3bn), Coface ($1.1bn), Ontex Group ($81m) and IMCD ($723m). The largest European IPO was executed on LSE, where AA raised $2.4bn. In terms of money raised, IPO activity in North America almost doubled relative to Q1. About $26.8bn was raised via 93 IPOs. Two transactions had a total money raised over $2bn: Ally Financial on NYSE ($2.6bn) and JD.com on NASDAQ ($2.bn). A total of $65.9bn was raised via 39 FOs (Q1: $55.8bn via 362 FOs). The most significant was the accelerated bookbuild by Oil & Gas company Williams Companies ($3.5bn on NYSE). Total money raised via IPOs in Asia stood at $9.3bn in Q2 (Q1: $18.bn). The six largest Asian IPOs on a year to date basis were all executed in Q1. The most sizeable IPO in Q2 was the listing of Tianhe Chemicals Group on HKEx ($654m). Regulatory issues continue to dominate the Chinese markets. After the China Securities Regulatory Commission restarted the Chinese IPO market in June after some key amendments, ten companies were allowed to list on the Shanghai and Shenzhen stock exchanges. Asian FO activity stood at $4.3bn raised via 223 transactions (Q1: $3.9bn via 213 FOs). Shenzhen did see the second largest FO globally: BOE Technology Group raised $7.4bn. Africa saw a strong second quarter of 214 with 6 IPOs and 17 FOs, raising a combined total of $4.2bn. A number of these transactions comprised of FOs and IPOs executed on both an African exchange and LSE: Intu Properties raised $846m via an FO on Johannesburg Stock Exchange and LSE, SEPLAT Petroleum Development raised $53m via an IPO on Nigerian Stock Exchange and LSE and Aquarius Platinum raised $235m via an FO on ASX, Johannesburg Stock Exchange and LSE. Another region that saw substantial activity was Australasia with 19 IPOs and 88 Fos, raising a combined total of $13.1bn. Capital raising at IPOs and FOs North America Europe Asia 296 / 1,111 24 / 986 231 / 1,193 146 / 579 $23,6bn $222,8bn 171 / 671 136 / 572 151 / 327 $184,4bn 82 / 482 $173,2bn $121,7bn $124,4bn $111,2bn $115,1bn $54,bn $63,9bn $83,bn $4,7bn $33,3bn $15,9bn $37,1bn $49,1bn 211 212 213 H1 214 211 212 213 H1 214 569 / 686 371 / 634 36 / 91 $113,6bn $135,1bn $139,5bn 181 / 436 $91,bn $51,3bn $48,1bn $71,2bn $27,4bn 211 212 213 H1 214 Legend: the bars show the money raised ($bn) in IPOs and FOs ( FO IPO). The number of IPOs and FOs are shown as follows: number of IPOs / number of FOs Note: The location of the listing venue(s) denotes the region(s) of the IPO or FO Note: Several regions, such as Australasia, Middle East, Africa and Latin America are excluded from the analysis in the graphs Source: Dealogic as of 3 June, 214 5
Overview Global Trends European Trends Case Study Strong IPO activity in Continental Europe places the recently listed Euronext among the leading exchanges globally LSE already saw more money raised during the first six months of 214 than in full year 213 The activity on NASDAQ and the number of Health Care IPOs reflect the buoyant market for Biotechs Exchange Split: 213 Exchange Split: H1 214 $bn $8bn $6bn $4bn $2bn $bn $21.3 bn NYSE LSE NASDAQ OMX Total no. of IPOs: 87 HKEx Tokyo SE ASX Other 35 3 25 15 5 $5bn $4bn $3bn $2bn $1bn $bn $128.9 bn LSE NYSE NASDAQ OMX Total no. of IPOs: 558 HKEx Euronext Tokyo SE Other 25 15 5 No. of IPOs No. of IPOs Sector Split: 213 Sector Split: H1 214 $bn $8bn $6bn $4bn $2bn $bn $194.3 bn Total no. of IPOs: 849 35 3 25 15 5 $5bn $4bn $3bn $2bn $1bn $bn $125.4 Total no. of IPOs: 547 25 15 5 No. of IPOs No. of IPOs Note: Sector classification is based on the Industry Classification Benchmark (ICB) Note: LSE Group includes Borsa Italiana Note: If IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges Source: Dealogic, Bloomberg as of 3 June, 214 6
Overview Global Trends European Trends Case Study Despite the carve-out of Euronext, NYSE continues to dominate global FO activity in terms of money raised The $9.2bn FO by Deutsche Bank spurs activity on Deutsche Börse Jumbo deals by Financials continue to dominate global FO activity Exchange Split: 213 Exchange Split: H1 214 $25bn $bn $62. bn Total no. of FOs: 3,178 2. 1.5 $15bn $12bn $346.2bn Total no. of FOs: 1,722 1. 8 $15bn $bn 1. $9bn $6bn 6 4 $5bn 5 $3bn $bn NYSE NASDAQ OMX LSE Euronext Tokyo SE HKEx Other $bn NYSE NASDAQ OMX LSE Deutsche Börse TMX Group Euronext Other No. of FOs No. of FOs Sector Split: 213 Sector Split: H1 214 $25bn $bn $586.bn Total no. of FOs: 3,34 2. 1.5 $15bn $12bn $329.3bn Total no. of FOs: 1,648 1. 8 $15bn $bn 1. $9bn $6bn 6 4 $5bn 5 $3bn $bn $bn No. of FOs No. of FOs Note: Sector classification is based on the Industry Classification Benchmark (ICB) Note: LSE Group includes Borsa Italiana Note: If IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges Source: Dealogic, Bloomberg as of 3 June, 214 7
Overview Global Trends European Trends Case Study Money raised via PE-backed IPOs almost tripled relative to H1 213 Global PE-backed IPOs (Q3 211 H1 214) Money raised in PE-backed IPOs ($bn) 2 18 16 14 12 1 8 6 4 2 March: Ziggo ($1.2bn on Euronext A dam) April: BTG Pactual ($1.7bn on BOVESPA / Euronext A dam) October: Plain GP Holdings ($2.9bn on NYSE) October: Antero Resources Corp ($1.8bn on NYSE) December: Hilton Worldwide ($2.7bn on NYSE) July: IHH Healthcare ($2.1bn on Bursa Malaysia January: Santander Consumer USA ($2.bn on NYSE) March: ISS ($1.8bn on NASDAQ OMX Copenhagen) April: Ally Financial ($2.6bn on NYSE) May: JD.com ($2.1bn on NASDAQ) June: AA ($2.4bn on LSE Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 5% 4% 3% 2% 1% % PE-backed / total IPOs 211 212 213 214 Other regions Asia Europe North America Number of PE-backed IPOs of total (%) Highlights PE-backed IPO activity has been increasing and money raised in H1 214 almost tripled relative to H1 213. More recently, money raised via PE-backed IPOs in Q2 214 more than doubled relative to Q1 214. In total, $39.9bn was raised via 88 transactions (Q1: $17.7bn via 47 transactions). Europe was the leading region in terms of PE-backed activity: via 38 transactions, a total of $18.5bn was raised (Q1: $7.5bn via 15 deals). North America saw 31 PE-backed IPOs raising $16.4bn (Q1: $8.bn via 25 transactions. In Asia, 11 PE-backed IPOs were executed raising $2.3bn (Q1: $1.8bn via 5 transactions). Of the largest five PE-backed IPOs in the first half of 214, four were executed during the second quarter of 214. Pricing Date Issuer Name Exchange Pricing 1 Money Raised 9-Apr-14 Ally Financial NYSE Bottom of range 2,556 23-Jun-14 AA LSE In range 2,356 21-May-14 JD.com NASDAQ Above range 2,47 23-Jan-14 11-Jun-14 Top PE-backed IPOs H1 214 Santander Consumer USA Holdings B&M European Value Retail NYSE Bottom of range 2,46 LSE In range 1,813 Note: PE-backed IPOs include all IPOs backed by a financial sponsor Source: Dealogic as of 3 June, 214 8
Overview Global Trends European Trends Case Study Strong European IPO activity in Q2 214 with 7 of the top 1 IPOs YTD executed in May or June The PE-backed IPO of AA on LSE ($2.4bn) was the largest European IPO in the first half of 214 Banks dominated European FO activity with 6 of the 1 largest FOs in the first half of 214 Late June, Deutsche Bank raised $9.2bn to improve its regulatory ratios and to fund a restructuring Pricing Date Issuer Name Issuer Country Exchange Price Range (local currency) Offer Price (Local currency) Pricing 1 Money Raised ($m) 23-Jun-14 AA LSE 2.5-2.5 2.5 In range 2,356 31-Jan-14 Altice 2 Euronext Amsterdam 24.75-31.25 28.25 In range 2,43 11-Jun-14 B&M European Value Retail LSE 2.3-2.9 2.7 In range 1,813 13-Mar-14 ISS NASDAQ OMX Copenhagen 14. - 175. 16. In range 1,752 26-Jun-14 Merlin Properties SOCIMI BME 1. - 1. 1. In range 1,72 8-May-14 Applus Services BME 13.25-16.25 14.5 In range 1,685 25-Feb-14 Kennedy Wilson Europe Real Estate LSE 1. - 1. 1. In range 1,549 1-Jun-14 Elior Euronext Paris 14.35-17.5 14.75 Bottom of range 1,3 19-Jun-14 Euronext Euronext Amsterdam, Brussels, Paris 19. - 25. 2. Bottom of range 1,146 26-Jun-14 Coface Euronext Paris 9.6-11.2 1.4 In range 1,128 Pricing Date Issuer Name Issuer Country Largest 1 European IPOs H1 214 Exchange Largest 1 European FOs H1 214 Price Range (local currency) Offer Price (Local currency) Deal Type Money Raised ($m) 25-Jun-14 Deutsche Bank Deutsche Börse 22.5-22.5 22.5 Rights offer / Accelerated bookbuild 9,187 26-Mar-14 Lloyds Banking Group LSE.79 -.79.76 Accelerated bookbuild 6,923 29-Apr-14 Eurobank Ergasias Athens SE.3 -.33.31 Accelerated bookbuild 3,965 22-Jan-14 Raiffeisen Bank Int. Vienna SE 27.54-27.54 28.5 Rights offer / Accelerated bookbuild 3,762 9-May-14 National Bank of Greece Athens SE 3.4-3.4 2.2 Accelerated bookbuild 3,476 4-Jun-14 Repsol BME 2.87-2.87 2.1 Accelerated bookbuild 2,848 4-Jun-14 Volkswagen Deutsche Börse 195.65-195.65 191. Accelerated bookbuild 2,723 21-May-14 PSA Peugeot Citroen Euronext Paris 6.77-6.77 6.77 Rights offer 2,676 13-Mar-14 Adecco SIX Swiss Exchange 78.6-78.6 71.5 Accelerated bookbuild 2,464 26-Mar-14 Piraeus Bank Athens SE 1.99-1.99 1.7 Accelerated bookbuild 2,419 1) IPOs are classified as In Range if the IPO is priced in the middle 5% of the price range. The top and bottom 25% are classified as Top of Range and Bottom of Range 2) Altice is incorporated in Luxembourg, but the issuer nationality is France Source: Dealogic, Bloomberg as of 3 June, 214 9
16 11 6 1-4 75 55 35 15-5 -25 2 15 1 5-5 -1 3 25 2 15 1 5-5 -1-15 -2 3 25 2 15 1 5-5 -1-15 -2 3 25 2 15 1 5-5 -1-15 -2 3 25 2 15 1 5-5 -1-15 -2 Overview Global Trends European Trends Case Study With 72 IPOs raising a total of $22.7bn, the UK strengthened its leading position in Europe this year June has proven to be a pivotal month for European equity markets with 47 IPOs raising $2.6bn European IPOs IPO activity in selected European countries (211 H1 214) Rank (#) 1. 2. 3. 4. Number of IPOs 136 146 151 42 $19,2bn 37 $6,6bn 77 $21,1bn 72 $22,7bn 23-Jun: AA ($2.4bn) 11-Jun: B&M European Value Retail ($1.8bn) $,bn 2 $2,9bn $,bn 3 $3,9bn 31 Jan: Altice ($2.bn) 19-Jun: Euronext ($1.1bn) $,2bn $,3bn $2,4bn 23 15 24-Jun: 1-Jun: 12 Braas Monier Elior 8 5 Building ($1.3bn) 11 3 Group 9 ($639m) 19-Jun: Euronext ($1.1bn) $5,8bn $2,1bn $2,7bn $3,3bn $1,2bn 22-May: Stabilus ($358m) Money raised ($bn) 82 1 12 11-Apr: Anima Holding ($1.1bn) 4 $,8bn 1 $,2bn $1,7bn $3,2bn 27-Jun: Fineco Banca ($916m) Rank ($) 1. 2. 3. 4. $33,3bn FY 211 $15,9bn FY 212 $37,1bn FY 213 $49,1bn H1 214 4 $5,3bn $,bn $,bn 5 $5,3bn 26-Jun: Merlin Properties ($1.7bn) 8-May: Applus Services ($1.7bn) Note: The vertical axes of the UK graph have different scales compared to the other European countries Source: Dealogic as of 3 June, 214 1
65 55 45 35 25 15 5-5 275 225 175 125 75 25-25 8 7 6 5 4 3 2 1-1 -2 8 7 6 5 4 3 2 1-1 -2 8 7 6 5 4 3 2 1-1 -2 8 7 6 5 4 3 2 1-1 -2 8 7 6 5 4 3 2 1-1 -2 Overview Global Trends European Trends Case Study Jumbo deals by banks continue to drive European FO activity Deutsche Bank raised a total of $9.2bn to protects itself against known capital challenges while the UK government further reduced its stake in state-rescued Lloyds Banking Group ($6.9bn) European FOs FO activity in selected European countries (211 H1 214) Rank (#) 1. 2. 3. 4. Number of FOs 572 482 579 234 $22,2bn 21 $26,3bn 226 $41,6bn 153 $27,2bn 26-Mar: Lloyds Banking Group ($6.9bn) 7-May: Babcock International ($1.9bn) 6 7 $2,1bn $3,1bn 2 $11,8bn 5 $1,7bn 24-Jun: Altice ($1.2bn) 9-Apr: Arseus ($43m) 36 $5,6bn 26 $1,1bn 45 $22,8bn 25 $1,3bn 21-May: PSA Peugeot Citroen ($2.7bn) 25-Jun: GDF Suez ($2.1bn) 79 $39,5bn 55 $14,4bn 7 $23,7bn 3 $22,1bn 25-Jun: Deutsche Bank ($9.2bn) 4-Jun: Volkswagen ($2.7bn) Money raised ($bn) 327 16 $4,7bn 13 $9,9bn 19 $7,9bn 15 $11,bn 4-Jun: Repsol ($2.8bn) 1-Apr: Iberdrola ($2.1bn) Rank ($) 1. 2. 3. 4. $124,4bn FY 211 $115,1bn FY 212 $173,2bn FY 213 $111,2bn H1 214 8 $4,8bn 2 $,2bn 6 5 $12,6bn $11,6bn 29-Apr: Eurobank Ergasias ($4.) 9-May: National Bank of Greece ($3.5bn) Note: The vertical axes of the UK graph have different scales compared to the other European countries Source: Dealogic as of 3 June, 214 11
Overview Global Trends European Trends Case Study LSE maintains its position as the leading European exchange while momentum in Europe continues to increase The IPOs of Merlin Properties and Applus Services place BME among the leading European exchanges Similar to the global trend, European IPO activity is dominated by Financials (e.g. Merlin Properties, Kennedy Wilson, Euronext) and Consumer Services (e.g. AA, B&M European Value Retail, Elior) Exchange Split: 213 Exchange Split: H1 214 $25bn $2bn $39.bn Total no. of IPOs: 151 8 $25bn $2bn $51.2bn Total no. of IPOs: 161 8 $15bn $1bn $5bn $bn LSE Euronext Deutsche Börse Borsa Italiana Warsaw SE Oslo Børs Other 6 4 2 $15bn $1bn $5bn $bn LSE Euronext BME Borsa Italiana NASDAQ OMX (EU) SIX Swiss Exchange Other 6 4 2 No. of IPOs No. of IPOs Sector Split: 213 Sector Split: H1 214 $25bn $2bn $37.1bn Total no. of IPOs: 146 8 $25bn $2bn $49.1bn Total no. of IPOs: 151 8 $15bn 6 $15bn 6 $1bn 4 $1bn 4 $5bn 2 $5bn 2 $bn $bn No. of IPOs No. of IPOs Note: sector classification is based on the Industry Classification Benchmark (ICB) Note: if IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges Source: Dealogic, Bloomberg as of 3 June, 214 12
Overview Global Trends European Trends Case Study LSE strengthens its leading position in Europe, while Deutsche Börse ranks second as a result of Deutsche Bank s jumbo FO The 33 largest FOs in Europe in H1 214 concern Financials The top 7 Financials FOs were executed by banks, accounting for 54% of money raised YTD in Europe Exchange Split: 213 Exchange Split: H1 214 $bn $8bn $6bn $4bn $2bn $178.5bn Total no. of FOs: 588 25 15 5 $5bn $4bn $3bn $2bn $1bn $112.6bn Total no. of FOs: 331 15 5 $bn LSE Euronext Deutsche Börse NASDAQ Athens SE BME Other OMX (EU) $bn LSE Deutsche Börse Euronext Athens SE BME NASDAQ OMX (EU) Other No. of FOs No. of FOs Sector Split: 213 Sector Split: H1 214 $bn $8bn $173.2bn Total no. of FOs: 579 25 $bn $8bn $111.2bn Total no. of FOs: 327 25 $6bn 15 $6bn 15 $4bn $4bn $2bn 5 $2bn 5 $bn $bn No. of FOs No. of FOs Note: sector classification is based on the Industry Classification Benchmark (ICB) Note: if IPOs or FOs take place on two or more exchanges, the full amount of money raised is attributed to all exchanges Source: Dealogic, Bloomberg as of 3 June, 214 13
Overview Global Trends European Trends Case Study A prolonged period with low volatility spurred European IPO activity to record levels A correlation is observed between increased volatility indices and weak European IPO activity ($m) Monthly Money Raised in European IPOs ($m) 25. 2. 15. 1. 5. Money Raised in European IPOs ($m) VStoxx Index (monthly average) VIX Index (monthly average) Window closed Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 5 4 3 2 1 Volatility Indices which is also shown if we focus on the actual number of European IPOs Monthly number of European IPOs 5 4 3 2 1 Monthly Number of European IPOs VStoxx Index (monthly average) VIX Index (monthly average) 5 4 3 2 1 Volatility Indices Jan-1 Apr-1 Jul-1 Oct-1 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Note: the VStoxx Index and the VIX Index are both volatility indices. The VStoxx is based on the Euro Stoxx 5 Index and the VIX Index is the Chicago Board Options Exchange Volatility Index Source: Dealogic, Bloomberg as of 3 June, 214 14
Case Studies 15
Case study The IPO of Euronext on Euronext Transaction highlights On 2 June 214, Euronext s ordinary shares were listed on Euronext Paris, Euronext Amsterdam and Euronext Brussels. Euronext also intends to list on Euronext Lisbon before the fourth quarter of 214. Shares were priced at 2., raising a total of 845m ($1.148m). In 212, IntercontinentalExchange (ICE), the global network of regulated exchanges and clearing houses for financial and commodity markets, agreed to buy NYSE Euronext for about $8.2 billion. As ICE was primarily interested in NYSE and Euronext s European derivatives business (Liffe), ICE had planned to spin off or sell the pan European exchange operator Euronext after obtaining regulatory approval. Euronext operates regulated equity, fixed income securities and derivatives markets in Paris, Amsterdam, Brussels, Lisbon and London. The IPO was oversubscribed which resulted in the sale of all the 42m shares representing 6.4% of the total issued ordinary share capital. Despite the high demand, the IPO price was set at the lower end of the announced price range. Over 4.8m shares were allocated to institutional investors (97% of the offered shares) and 1.4m shares were made available to retail investors (3% of the offered shares). Pre-IPO, ICE entered into a separate transaction with a group of institutional investors including ABN Amro and BNP Paribas in which almost 33% of the shares were sold at a 4% discount relative to the IPO price. In addition, 188.296 shares were sold at a 2% discount to eligible employees and those of its majority owned subsidiaries in Belgium, France, the Netherlands, Portugal and the UK. The over-allotment option of 4.2m shares has not yet been exercised. Euronext s share price dropped on the first day of trading to 19.6 ( 2.% as compared to the offer price). On 3 June 214, trading in Euronext shares closed at 18.57 ( 7.2%), implying a total market capitalisation of 1,3m ($1,779m). Trading on Euronext Amsterdam, Brussels and Paris Summary statistics Share price ( ) 21 2 19 18 1-day performance: 2.1% Current performance: 7.2% 1, 7,5 5, 2,5 Trading volume (millions of shares) Listing venue: Euronext Amsterdam, Brussels, Paris Country of incorporation: Netherlands Filing range: 19. - 25. Pricing: 2. Pricing date: 19 June, 214 Trading date: 2 June, 214 Money raised: 845m ($1.1bn) Shares offered at IPO: 42,248,881 (6.4%) Over-allotment exercised: - (4.2m shares authorized) Shares outstanding: 7,, (%) Market cap at listing: 1.4bn ($1.9bn) Current market cap: 1.3bn ($1.8bn) 17 19-Jun 2-Jun 23-Jun 24-Jun 25-Jun 26-Jun 27-Jun 3-Jun Trading volume on Euronext Amsterdam, Brussels and Paris Share price, Source: Dealogic, Thomson One, Bloomberg as of 3 June, 214 16
Case study The IPO of TSB Banking Group on LSE Transaction highlights TSB Banking Group had a buoyant debut on the London Stock Exchange with its IPO on 2 June 214. With an offer price of 2.6, the pricing was set just above the midpoint of the initial filing range ( 2.2-2.9), raising 455.m ($771.6m). On its first day, the share price closed 11.5%. The British retail bank has a nationwide network of 631 branches - about 6% of UK s total network - across England, Scotland and Wales. Headquartered in Edinburgh, TSB serves over 4.6m customers with over 2bn of loans and customer deposits and 8,6 employees. The brand TSB originated in the UK about four decades ago when various trustee saving banks were combined. In 1995, the Trustee Savings Bank merged with Lloyds Banking Group to form Lloyds TSB and became one of the largest banks in the UK. As a result of the government support in 9, the Lloyds Banking Group is required by the European Commission to dispose of a significant part of its UK retail banking business. The original deadline to complete the full disposal has been revised from November 213 to December 215 but may be extended depending on market conditions. In 212, the Lloyds Banking Group initially agreed to sell TSB to the Co-op Bank for 75m but Co-op pulled the deal in 213 blaming the deteriorating economic conditions. In the IPO, the parent originally planned to sell a 25% stake, but instead unloaded 35% of the business. Should the underwriters exercise their over-allotment option in the thirty days after the offer, the free float could rise to 38.5%. The two appointed global co-ordinating banks were Citigroup and J.P. Morgan with UBS as joint bookrunner. The transaction consisted out of an institutional (7%) and a retail (3%) tranche. The retail offer aimed at UK, Channel Islands and the Isle of Man investors, contained a bonus share scheme in which one free and fully paid-up bonus share is received for every twenty shares bought in the IPO and continuously held for a one-year period. In the next years, earnings will be retained to preserve capital to support TSB s growth strategy. After FY217, a 4-6% dividend pay-out ratio is expected. Trading on the London Stock Exchange (LSE) Summary statistics 3 12 Listing venue: London Stock Exchange Share price (GBp) 29 28 27 26 25 24 1-day performance: 11.5% Current performance: 8.3% Pricing 19-Jun 2-Jun 23-Jun 24-Jun 25-Jun 26-Jun 27-Jun 3-Jun 8 6 4 2 Trading volume (millions of shares) Country of incorporation: United Kingdom Filing range: 2.2-2.9 Pricing: 2.6 Pricing date: 2 June, 214 Trading date: 2 June, 214 Money raised: 455.m ($771.6m) Shares offered at IPO: 175,, (35%) Over-allotment exercised: - (17.5m shares authorized) Shares outstanding: 5,, (%) Market cap at listing: 1.3bn ($2.2bn) Trading volume on LSE Share price Current market cap: 1.4bn ($2.4bn) Source: Dealogic, Thomson One, Bloomberg as of 3 June, 214 17
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