¡Vamos! Spanish 2024 IPO pipeline starts to look exciting

Data InsightECM Explorer 3 November

¡Vamos! Spanish 2024 IPO pipeline starts to look exciting

ECM bankers are getting excited about Spain, a market that is either on or off. One told this news service that requests for proposals (RFPs) from the country are hitting his desk again, warranting a trip to see potential new clients.

Meanwhile, a number of IPO candidates in Madrid and Barcelona with potentially high valuations are finally setting their syndicates.

These upcoming IPOs will be much needed. This news service previously reported that a batch of hopefuls were holding fire on their listings as they waited for peers elsewhere in Europe to open the market.

So far, Spanish IPOs have pulled only USD 25.15m in aggregate volumes in 2023, a worse track than last year’s total USD 300m, according to Dealogic data. While far from the glorious USD 15bn recorded long ago in 2007, Spain has seen peaks of issuance over the past decade, topping USD 9.5bn in 2015. However, since 2019 the country’s IPO performance has weakened.

The banker’s optimism, and that of others in the market, stems from several fast-evolving situations. Cirsa Gaming sponsor Blackstone [NYSE:BX] is close to finalising banks to run an IPO of the Spanish gambling company, as reported, with Deutsche Bank and BBVA expected to be appointed.

This would serve as a positive market opener with initial valuations of the company reportedly exceeding EUR 3bn. Hotelbeds, the hotel room booking company backed by Cinven, EQT [EQTAB.ST] and CPP Investments, is also reportedly lining up additional banks to go public next year with an EUR 1bn (USD 1.07bn) offering likely to be carried out in Madrid.

There is a cherry on the cake. Luxury consumer products group Puig is in talks with advisers as it seeks to hand out additional mandates for its IPO and as reported the company is scouting second-line banks to help with the structuring and execution of the deal, as reported. With an expected valuation of around EUR 8bn-EUR 10bn, it is the deal that is likely to attract plenty of buyside attention if management presses on with the plan on the domestic exchange.

“This is the one that people will want to have a part in and investors will jump on as soon as it launches,” said the optimistic banker. “If it goes in Q1/Q2, then it will be the champion of the year. If you are a fund manager, you don’t have too much space to put too many eggs in several baskets- so this will be the one that I expect them to bet on for H1.”

A second ECM banker agreed that the end of the cycle of rising interest rates will be good for Spanish IPOs. He added that the Iberian pipeline is very good, but most of the companies which could be listed have no urgent need for capital to grow, meaning they would not hesitate to halt their processes if market conditions worsened.

No one will want to pull the trigger if the geopolitical situation escalates further, or the threat of a recession materialises, a third banker agreed, meaning that there should be some limit to the jubilant confidence among the advisory ranks.

On top of these new names, there is a thick backlog of deals in the making that have not yet managed to find a window. This includes warehouse manufacturing company Mecalux (potential valuation EUR 3bn) and retailer Tendam. The retailer's CEO Jaume Miquel recently said it is evaluating possible strategic alternatives to take the company to its next phase of growth, including the possibility of a public offering.

A number of banks are pushing for roles on these syndicates, if only for adjacent bookrunner positions, and this makes the processes particularly competitive, the third banker said. “If these really land, everyone will want to be involved.”

Looking further ahead, Mergermarket's Likely to Exit (LTE) predictive algorithm also brings up potential candidates.* Idealista has an LTE score of 58 out of 100. It is a perennial IPO candidate.

*Mergermarket's LTE predictive analytics assign a score to sponsor-backed companies to help track and predict when an exit could occur through M&A, an IPO, a direct listing or a deSPAC transaction. 

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