Goldman Sachs sees more Accelerated Bookbuild Offerings
Private equity investors, corporations and billionaire families have been taking advantage of the high prices on the stock markets to cash in and divest themselves of shareholdings. „This year we have seen significantly more placements of large blocks of shares in Europe – so-called Accelerated Bookbuild Offerings,“ Philipp Suess, who is responsible for the equity capital markets business in Germany and Austria at Goldman Sachs, told Börsen-Zeitung. „The volume in Europe jumped by more than 40% to 24.1 billion euros.“ The average size of ABO transactions was 650 million euros, and the discount on the most recent price before the placement was 5.7%.
„Some long-term shareholders in particular took advantage of the high share prices to diversify their investments,‘ says Suess, explaining the sellers' motives. „In some cases, families have partially divested themselves of shareholdings after several decades.“ In other cases, it was financial investors or corporations that exited.
Exit from Haleon
The largest ABO was launched by the pharmaceutical group Pfizer, which sold shares of the non-prescription medicine manufacturer Haleon with a volume of 3 billion euros. In addition, the Sandoz family foundation sold Novartis shares worth 2.8 billion euros. And the Agnelli family reduced its stake in Ferrari by selling shares worth 2.7 billion euros. The discounts on the share price were 2.8% (Haleon), 2.5% (Novartis) and 6.9% (Ferrari).
According to Suess, demand came mainly from Anglo-Saxon investors, who are partly attracted by the lower valuations of European shares. „From April onwards, however, the ABO business – as well as the IPO business – was also significantly weaker,“ the banker states. „The uncertainty caused by the US tariffs announcements led to a wait-and-see attitude.“
Stock markets recover
The stock markets have recovered significantly in recent weeks. „There should therefore be a positive environment for share placements again once the quarterly figures are published,“ believes Suess. „Especially as we continue to see inflows of funds from Anglo-Saxon investors into European equity funds.“
The pipeline for IPOs for the second half of the year is well filled. Investor interest in profitable companies with good growth prospects continues unabated.
No exodus to the USA
However, there have only been two IPOs announced in Germany so far this year, in the Regulated Unofficial Market, for the electricity grid company Pfisterer (which IPO'd last week), and the software company Innoscripta.
Things are not looking much better in the USA: There, Goldman Sachs and Citigroup have taken on an IPO on the Nasdaq with the company Yuanbao with a volume of just 30 million dollars – the first time they have worked on such a small IPO since 2018.
The fear of an „exodus“ of European companies that prefer a listing in the US to their home markets is certainly exaggerated. This is the conclusion of a study by the British think tank New Financial. Rather, the pace of delistings via take-private deals shows that a reform of the European stock markets is urgently needed.
„While Europe cannot afford to be complacent, the talk of an exodus is exaggerated and the grass is not always greener in the US,“ says William Wright, one of the authors of the study. The 130 European companies that have made an initial listing in the US in the last ten years, whether through an IPO, a direct listing, a change of their initial listing or a merger with a US-listed Spac (Special Purpose Acquisition Company), account for only 2% of listed companies in Europe. A fifth of the companies that moved to the US are no longer listed, and those that remain account for only 6% of the total value of European stock markets.
