Porsche IPO set to close; Pendragon has buyout interest; Lone Star and Bank of Cyprus deal off

Good morning Eurohubsters, Craig McGlashan here with Wednesday’s Dealflow.

Much of the private equity world – and beyond – will be keeping an eye on the IPO by Volkswagen of its luxury sportscar brand Porsche, which closes later today. European IPOs have been thin on the ground so far this year – blocking one traditional exit route for PE firms – so the bumper trade could offer something of a bellwether for the rest of the year.

One-off? Several reports have suggested that the deal is likely to be priced at the top end of the €76.50-€82.50 range, valuing Porsche at up to €75 billion. That’d make it one of the biggest ever European IPOs.

It’s also in stark contrast to the year so far in European IPOs. A week ago, we wrote about how European IPO values in the first half reached a 10-year low and the market was “largely closed for most issuers” in the second quarter, according to PwC. Second quarter IPO issuance in Europe totalled just €2.1 billion from 29 IPOs compared to €23.1 billion from 142 IPOs in the second quarter of 2021, the firm said.

Books for the Porsche IPO close at 1pm London time and the shares will be listed on the Frankfurt Stock Exchange tomorrow.

Despite the bumper deal, there is some scepticism that the IPO is a harbinger for things to come, with some people suggesting Porsche is a special case given its strong brand.

“One transaction alone cannot re-open the floodgates of IPO executions,” Antoine de Guillenchmidt, co-head of EMEA equity capital markets at Goldman Sachs, told Reuters. “This requires more predictable macro and reduced equity market volatility.”

Volkswagen is headquartered in Wolfsburg and Porsche in Stuttgart.

Private road. Sticking with the automobile industry, Pendragon, one of the UK’s largest motor retailers, received an unsolicited buyout proposal this week by shareholder Hedin Mobility Group. The offer is for £0.29 a share and the Pendragon board is considering the proposal.

That would value the Nottingham-headquartered company at around £406 million ($434 million; €453 million). Pendragon is listed on the London Stock Exchange.

Hedin is headquartered in Mölndal in Sweden.

That’s the second bit of UK take-private news we’ve written this week. Yesterday, we wrote about the board of UK waste management firm Biffa agreeing to a take-private deal with Energy Capital Partners (ECP) that valued the company at around £1.3 billion

That was slightly below the original £1.4 billion valuation.

Deal off. US private equity firm Lone Star will not be making an offer for the Bank of Cyprus, the Nicosia-headquartered bank has confirmed.

The board of the Bank of Cyprus had already rejected three proposals from Dallas, Texas-headquartered Lone Star.

The potential deal had drawn the scrutiny of the Cypriot government, as we wrote back in late August.

Connection. Abrdn has made a majority equity investment in Wessex Internet. Wessex is a full fibre operator in the south-west of England. Abrdn’s investment is aimed to accelerate the deployment of Wessex’s full fibre-to-the-home network across rural part of south-west England.

The investment comes off the back of Blandford-based Wessex being awarded the first subsidy contract under the UK government’s £5 billion Project Gigabit broadband scheme, announced at the end of August.

“This kind of investment is crucial to allowing the supply of ultrafast, reliable and cost-effective broadband in rural areas to help drive productivity, connect communities and reduce the digital divide across the UK,” said Alex Anderson, investment director, abrdn Core Infrastructure.

Sporting move. Bruin Capital- and Quadrant Private Equity-backed TGI Sport has completed its third deal in a recent flurry, acquiring Sportseen.

London-based Sportseen was founded in 2007 by Chris Jones and Vasco Gomes who will remain with the company. The company specialises in rights acquisition, sales, creative, and distribution of LED advertising. Its clients include the Football Associations of England, Wales and Scotland, and the Welsh and Italian Rugby Unions.

“This is another great move for TGI, which has unlimited potential as a leading, global media services agency,” said George Pyne, founder and CEO of Bruin Capital. “We are delighted with the aggressive approach in this burgeoning space. The addition of Sportseen – and all three companies – embodies how we plan to transform TGI with aggressive deals in new spaces.”

Finally, tomorrow PE Hub Europe’s Nina Lindholm, David Wansboro and I will be at the HPE Europe conference in London on Thursday. It’d be great to grab a quick chat if you’re there – let me know at craig.m@peimedia.com and we can get something arranged.

That’s it from me – I’ll be back with you tomorrow.

Cheers,

Craig