PwC IPO Centre · Elior ($1.3bn), Coface ($1.1bn), Ontex Group ($810m) and IMCD ($723m). The...

PwC IPO Centre Q2 2014 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 [email protected]

Clifford Tompsett

[email protected]

Nadja Picard [email protected]

Jan-Willem de Groot

[email protected]

mailto:[email protected]






95 92

169

124 156

116

0

100

200

300

400

Jan Feb Mar Apr May Jun

2014

Monthly averages ($bn)

1.0

2.2

4.0

4.3

7.1

5.9

Monthly averages ($bn)

11.1

10.0

14

.6

15.3

12.2

24

.7

2

Summary & dashboard

Overview | Global Trends | European Trends | Case Studies

Note: The two indices on top are based on the 10Y 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 10Y average capital raised in European IPOs ($5.9bn on average for June) and FOs ($24.7bn on average for June)

Note: included deals > $5m

Source: Dealogic as of 30 June, 2014

230

276

197

149

81

348

0

100

200

300

400


2014

55

147 189

153

136

0

100

200

300

400


2014

72 62

168 130 130

194

0

100

200

300

400


2014

Money raised in the EU indexed on 10 year average

Money raised in the EU indexed on same month average (10 year)

+248 IPO

IPO (100 = $4.2bn) FO (100 = $14.7bn)

FO

+94 +391

“The above June IPO index level of 491 implies an amount of money raised in Europe, which is 391% above the 10-year average”

+16

491

Global IPO money raised was $74.8bn via 308 deals in the second quarter of

2014, compared to $56.2bn via 210 deals in the second quarter of 2013.

Contrary to Asian equity indices, the Dow Jones and S&P 500 again reached all-

time highs in the second half of June. Average global IPO returns remained strong

at 26.2% in the first half of 2014.

The global IPO market continued its very positive start of the year…

…boosted by a vivid European IPO market…

Continued strength in the equities markets and decreased market volatility are

also expected to support strong IPO momentum for the remainder of 2014.

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 106 IPOs, the European market strongly

outperformed both Q2 2013 ($7.0bn; 38 IPOs) and Q1 2014 ($16.4bn; 45 IPOs).

Global follow-on (FO) activity during Q2 2014 outpaced Q2 2013 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 2014.

…and Private Equity firms seeing ample opportunities to exit via an IPO

In the first half year of 2014, 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

Favourable IPO climate strengthens pipeline

3

Global capital market trends and developments

Strong European activity in H1 2014 drives money raised via IPOs to highest level since H2 2010

Top 5 Largest IPOs H1 2014


Global Summary Data Initial Public Offerings (IPOs) and Follow-ons (FOs) Highlights

The total amount of money raised via IPOs in H1 2014 stood at $125.4bn, which is the largest amount of money raised via IPOs since H2 2010. 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 2013, and more than doubled relative to Q1 2014.

FO activity saw a strong quarter as well. In terms of money raised, FO activity in Q2 2014 was at its highest level since Q4 2010.

1) IPOs are classified as ‘In Range’ if the IPO is priced in the middle 50% of the price range. The top and bottom 25% are classified as ‘Top of Range’ and ‘Bottom of Range’ Note: included deals > $5m

Source: Dealogic, Bloomberg as of 30 June, 2014

Pricing Date

Issuer Name Issuer

Country Exchange Pricing1 Money Raised

($bn)

22-Jan-14 HK Electric Investments HKEx Bottom of range $3.1bn

10-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 $2.0bn

Top 5 Largest FOs H1 2014

Global equity indices (2013–2014 H1 | rebased to 100)

90

100

110

120

130

140

150

160

Jan-12 Aug-12 Mar-13 Oct-13 May-14

FTSE100 Hang Seng Index S&P500

Pricing Date

Issuer Name 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. $4.0bn

22-Jan-14 Raiffeisen Bank Int. Vienna SE Acc. bookb./ Rights offer $3.8bn

Summary Statistics 2012 2013 H1 2013 H1 2014 Q2 2013 Q2 2014

Number of IPOs 716 849 350 547 210 308

Money Raised in IPOs $140.5bn $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 104 173 69 135 39 88

Value PE-Backed IPOs $21.5bn $58.2bn $21.8bn $57.6bn $13.8bn $39.9bn

Number of FOs 2,501 3,034 1,423 1,648 719 805

Money Raised in FOs $508.8bn $586.0bn $309.1bn $329.3bn $155.0bn $191.8bn

Average Deal Size of FOs $203.5m $193.1m $217.2m $199.8m $215.6m $238.3m

IPOs and FOs in leading capital market regions

General

trends

Highlights

In terms of ECM activity, Europe was the leading region in Q2 2014 with a total money raised of $99.5bn via 168 FOs and 106 IPOs. Almost 10% of the total money raised related to the FO of Deutsche Bank raising $9.2bn. Other banks executed significant FOs as well during Q2 2014: Eurobank Ergasias ($4.0bn), 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 ($810m) 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 ($2.0bn). A total of $65.9bn was raised via 309 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: $18.0bn). 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 $40.3bn raised via 223 transactions (Q1: $30.9bn via 213 FOs). Shenzhen did see the second largest FO globally: BOE Technology Group raised $7.4bn.

Africa saw a strong second quarter of 2014 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 $503m 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.


Legend: the bars show the money raised ($bn) in IPOs and FOs ( ). The number of IPOs and FOs are shown as follows: number of IPOs / number of FOs FO IPO

Capital raising at IPOs and FOs

4

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

Note: included deals > $5m Source: Dealogic as of 30 June, 2014

North America

$54.0bn $63.9bn $83.0bn $40.7bn

$184.4bn $222.8bn

$230.6bn

$121.7bn

2011 2012 2013 H1 2014

231 / 1,193

204 / 986 296 / 1,111

Europe

$33.3bn $15.9bn $37.1bn $49.1bn

$124.4bn $115.1bn

$173.2bn $111.2bn

2011 2012 2013 H1 2014

136 / 572 82 / 482

146 / 579

Asia

$91.0bn $51.3bn $48.1bn $27.4bn

$113.6bn $135.1bn $139.5bn

$71.2bn

2011 2012 2013 H1 2014

569 / 686 371 / 634 306 / 901 171 / 671 151 / 327

181 / 436

Strong IPO activity in Continental Europe places the recently listed Euronext among the leading exchanges globally

Overview | Global Trends | European Trends | Case Study

Exchange Split: H1 2014 Exchange Split: 2013

5

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 Note: included deals > $5m


LSE already saw more money raised during the first six months of 2014 than in full year 2013

The activity on NASDAQ and the number of Health Care IPOs reflect the buoyant market for Biotechs

Sector Split: H1 2014 Sector Split: 2013

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$20bn

$40bn

$60bn

$80bn

$100bn

NYSE LSE NASDAQOMX

HKEx Tokyo SE ASX Other

Money raised ($bn) No. of IPOs

0

50

100

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250

$0bn

$10bn

$20bn

$30bn

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$50bn

LSE NYSE NASDAQOMX

HKEx Euronext Tokyo SE Other


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$20bn

$40bn

$60bn

$80bn

$100bn


0

50

100

150

200

250

$0bn

$10bn

$20bn

$30bn

$40bn

$50bn


Total money raised: $201.3 bn

Total no. of IPOs: 870



Total money raised: $125.4




Despite the carve-out of Euronext, NYSE continues to dominate global FO activity in terms of money raised


6

The $9.2bn FO by Deutsche Bank spurs activity on Deutsche Börse

Jumbo deals by Financials continue to dominate global FO activity



0

500

1,000

1,500

2,000

$0bn

$50bn

$100bn

$150bn

$200bn

$250bn

NYSE NASDAQOMX

LSE Euronext Tokyo SE HKEx Other

Money raised ($bn) No. of FOs

0

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600

800

1,000

$0bn

$30bn

$60bn

$90bn

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NYSE NASDAQOMX

LSE DeutscheBörse

TMXGroup

Euronext Other


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$250bn


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$30bn

$60bn

$90bn

$120bn

$150bn



Total no. of FOs: 3,178

Total money raised: $586.0bn






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 Note: included deals > $5m


Pricing Date

Issuer Name Exchange Pricing1 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 2,047

23-Jan-14 Santander Consumer USA

Holdings NYSE Bottom of range 2,046

11-Jun-14 B&M European Value

Retail LSE In range 1,813

Money raised via PE-backed IPOs almost tripled relative to H1 2013

0%

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40%

50%

0

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12

14

16

18

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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

2011 2012 2013 2014

PE

-ba

ck

ed

/ tota

l IPO

s

Mo

ne

y r

ais

ed

in

PE

-ba

ck

ed

IP

Os

($

bn

)

Other regions Asia Europe North America Number of PE-backed IPOs of total (%)

7

Global PE-backed IPOs (Q3 2011 – H1 2014)

Highlights


PE-backed IPO activity has been increasing and money raised in H1 2014 almost tripled relative to H1 2013.

More recently, money raised via PE-backed IPOs in Q2 2014 more than doubled relative to Q1 2014. 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: $8.0bn 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 2014, four were executed during the second quarter of 2014.

Top PE-backed IPOs H1 2014

Note: PE-backed IPOs include all IPOs backed by a financial sponsor Note: included deals > $5m


March: Ziggo ($1.2bn on Euronext A’dam) April: BTG Pactual ($1.7bn on BOVESPA / Euronext A’dam)

July: IHH Healthcare ($2.1bn on Bursa Malaysia

January: Santander Consumer USA ($2.0bn on NYSE) March: ISS ($1.8bn on NASDAQ OMX Copenhagen)

October: Plain GP Holdings ($2.9bn on NYSE) October: Antero Resources Corp ($1.8bn on NYSE) December: Hilton Worldwide ($2.7bn on NYSE)

April: Ally Financial ($2.6bn on NYSE) May: JD.com ($2.1bn on NASDAQ) June: AA ($2.4bn on LSE

Strong European IPO activity in Q2 2014 with 7 of the top 10 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 2014

Banks dominated European FO activity with 6 of the 10 largest FOs in the first half of 2014

Late June, Deutsche Bank raised $9.2bn to improve its regulatory ratios and to fund a restructuring

8

1) IPOs are classified as ‘In Range’ if the IPO is priced in the middle 50% 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



Pricing Date

Issuer Name Issuer

Country Exchange

Price Range (local currency)

Offer Price (Local currency)

Pricing1 Money Raised

($m)

23-Jun-14 AA LSE 2.50 - 2.50 2.50 In range 2,356

31-Jan-14 Altice2 Euronext Amsterdam 24.75 - 31.25 28.25 In range 2,043

11-Jun-14 B&M European Value Retail LSE 2.30 - 2.90 2.70 In range 1,813

13-Mar-14 ISS NASDAQ OMX Copenhagen 140.00 - 175.00 160.00 In range 1,752

26-Jun-14 Merlin Properties SOCIMI BME 10.00 - 10.00 10.00 In range 1,702

08-May-14 Applus Services BME 13.25 - 16.25 14.50 In range 1,685

25-Feb-14 Kennedy Wilson Europe Real Estate LSE 10.00 - 10.00 10.00 In range 1,549

10-Jun-14 Elior Euronext Paris 14.35 - 17.50 14.75 Bottom of range 1,300

19-Jun-14 Euronext Euronext Amsterdam, Brussels, Paris 19.00 - 25.00 20.00 Bottom of range 1,146

26-Jun-14 Coface Euronext Paris 9.60 - 11.20 10.40 In range 1,128

Pricing Date

Issuer Name Issuer

Country Exchange

Price Range (local currency)

Offer Price (Local currency)

Deal Type Money Raised

($m)

25-Jun-14 Deutsche Bank Deutsche Börse 22.50 - 22.50 22.50 Rights offer / Accelerated bookbuild 9,187

26-Mar-14 Lloyds Banking Group LSE 0.79 - 0.79 0.76 Accelerated bookbuild 6,923

29-Apr-14 Eurobank Ergasias Athens SE 0.30 - 0.33 0.31 Accelerated bookbuild 3,965

22-Jan-14 Raiffeisen Bank Int. Vienna SE 27.54 - 27.54 28.50 Rights offer / Accelerated bookbuild 3,762

9-May-14 National Bank of Greece Athens SE 3.04 - 3.04 2.20 Accelerated bookbuild 3,476

4-Jun-14 Repsol BME 20.87 - 20.87 20.10 Accelerated bookbuild 2,848

4-Jun-14 Volkswagen Deutsche Börse 195.65 - 195.65 191.00 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 78.60 - 78.60 71.50 Accelerated bookbuild 2,464

26-Mar-14 Piraeus Bank Athens SE 1.99 - 1.99 1.70 Accelerated bookbuild 2,419

Largest 10 European FOs H1 2014

Largest 10 European IPOs H1 2014

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=MTuRvBDq6m1bAM&tbnid=DimTkbkVxMfhaM:&ved=0CAUQjRw&url=http://commons.wikimedia.org/wiki/File:European_flag,_upside_down.svg&ei=hvLCUfWcCM7XPLKAgagE&bvm=bv.48175248,d.ZWU&psig=AFQjCNHwI6a0bJXPCEepf_3-4ftKX6wwRw&ust=1371816962608630

With 72 IPOs raising a total of $22.7bn, the UK strengthened its leading position in Europe this year


9

Note: The vertical axes of the UK graph have different scales compared to the other European countries Note: included deals > $5m


June has proven to be a pivotal month for European equity markets with 47 IPOs raising $20.6bn

European IPOs

Number of IPOs

Money raised ($bn)

IPO activity in selected European countries (2011 – H1 2014)

$3

3.3

bn

$15

.9b

n

$3

7.1

bn

$4

9.1

bn

13

6

82

14

6

15

1

-40

10

60

110

160

FY2011

FY2012

FY2013

H12014

1.

2.

3.

4.

Rank (#)

Rank ($)

1.

2.

3.

4.

$19

.2b

n

$6

.6b

n

$2

1.1b

n

$2

2.7

bn

42 37

77 72

-25

-5

15

35

55

75

23-Jun:

AA ($2.4bn)

11-Jun: B&M

European Value Retail

($1.8bn)

Top 2

$0

.0b

n

$2

.9b

n

$0

.0b

n

$3

.9b

n

0

2 0 3

-10

-5

0

5

10

15

20

31 Jan: Altice

($2.0bn)

19-Jun: Euronext ($1.1bn)

$5

.3b

n

$0

.0b

n

$0

.0b

n

$5

.3b

n

4

0 0

5

-20

-15

-10

-5

0

5

10

15

20

25

30

26-Jun: Merlin

Properties ($1.7bn)

8-May: Applus Services ($1.7bn)

$0

.8b

n

$0

.2b

n

$1.

7b

n

$3

.2b

n

4 1

10 12

-20

-15

-10

-5

0

5

10

15

20

25

30

11-Apr: Anima

Holding ($1.1bn)

27-Jun:

Fineco Banca ($916m)

Top 2

Top 2

$2

.1b

n

$2

.7b

n

$3

.3b

n

$1.

2b

n

12

8 5

3

-20

-15

-10

-5

0

5

10

15

20

25

30

24-Jun:

Braas Monier Building

Group ($639m)

22-May: Stabilus ($358m)

Top 2 Top 2

$0

.2b

n

$0

.3b

n

$2

.4b

n

$5

.8b

n

11 9

15

23

-20

-15

-10

-5

0

5

10

15

20

25

30

10-Jun: Elior

($1.3bn)

19-Jun: Euronext ($1.1bn)

Top 2



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Jumbo deals by banks continue to drive European FO activity


10

Note: The vertical axes of the UK graph have different scales compared to the other European countries Note: included deals > $5m


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

Number of FOs

Money raised ($bn)

FO activity in selected European countries (2011 – H1 2014)

$12

4.4

bn

$115

.1b

n

$17

3.2

bn

$111.2

bn

57

2

48

2

57

9

32

7

-50

50

150

250

350

450

550

650

FY2011

FY2012

FY2013

H12014

Rank ($)

1.

2.

3.

4.

$2

2.2

bn

$2

6.3

bn

$4

1.6

bn

$2

7.2

bn

23

4

210

22

6

153

-25

25

75

125

175

225

275

26-Mar: Lloyds

Banking Group

($6.9bn) 7-May:

Babcock International

($1.9bn)

Top 2

$2

.1b

n

$3

.1b

n

$11

.8b

n

$1.

7b

n

6 7

20

5

-20

-10

0

10

20

30

40

50

60

70

80

24-Jun: Altice

($1.2bn)

9-Apr: Arseus

($403m)

$4

.8b

n

$0

.2b

n

$12

.6b

n

$11

.6b

n

8 2

6 5

-20

-10

0

10

20

30

40

50

60

70

80

29-Apr: Eurobank Ergasias ($4.0)

9-May:

National Bank of Greece ($3.5bn)

Top 2

Top 2

$5

.6b

n

$10

.1b

n

$2

2.8

bn

$10

.3b

n

36

26

45

25

-20

-10

0

10

20

30

40

50

60

70

80

21-May: PSA Peugeot

Citroen ($2.7bn)

25-Jun:

GDF Suez ($2.1bn)

Top 2

1.

2.

3.

4.

Rank (#)

$4

.7b

n

$9

.9b

n

$7

.9b

n

$11

.0b

n

16 13

19 15

-20

-10

0

10

20

30

40

50

60

70

80

4-Jun: Repsol

($2.8bn)

10-Apr: Iberdrola ($2.1bn)

Top 2

$3

9.5

bn

$14

.4b

n

$2

3.7

bn

$2

2.1

bn

79

55

70

30

-20

-10

0

10

20

30

40

50

60

70

80

25-Jun: Deutsche

Bank ($9.2bn)

4-Jun:

Volkswagen ($2.7bn)

Top 2











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http://en.wikipedia.org/wiki/File:Flag_of_Italy.svg







LSE maintains its position as the leading European exchange while momentum in Europe continues to increase


11

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



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)



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LSE Euronext DeutscheBörse

BorsaItaliana

WarsawSE

Oslo Børs Other


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NASDAQOMX(EU)

SIX SwissExchange

Other


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LSE strengthens its leading position in Europe, while Deutsche Börse ranks second as a result of Deutsche Bank’s jumbo FO


12

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



The 33 largest FOs in Europe in H1 2014 concern Financials

The top 7 Financials FOs were executed by banks, accounting for 54% of money raised YTD in Europe



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Athens SE BME Other


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LSE DeutscheBörse

Euronext Athens SE BME NASDAQOMX(EU)

Other


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Total no. of FOs: 588








Window closed

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Money Raised in European IPOs ($m)VStoxx Index (monthly average)VIX Index (monthly average)

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)…


13

Note: the VStoxx Index and the VIX Index are both volatility indices. The VStoxx is based on the Euro Stoxx 50 Index and the VIX Index is the Chicago Board Options Exchange Volatility Index



… which is also shown if we focus on the actual number of European IPOs


Case Studies

14

Transaction highlights

Case study – The IPO of Euronext on Euronext

On 20 June 2014, 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 2014. Shares were priced at €20.00, raising a total of €845m ($1.148m).

In 2012, 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 60.4% 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 40.8m 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 20% 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 €19.60 (2.0% as compared to the offer price). On 30 June 2014, trading in Euronext shares closed at €18.57 (7.2%), implying a total market capitalisation of €1,300m ($1,779m).

Summary statistics

15

Trading on Euronext Amsterdam, Brussels and Paris

Source: Dealogic, Thomson One, Bloomberg as of 30 June, 2014

Listing venue: Euronext Amsterdam, Brussels, Paris

Country of incorporation: Netherlands

Filing range: €19.00 - €25.00

Pricing: €20.00

Pricing date: 19 June, 2014

Trading date: 20 June, 2014

Money raised: €845m ($1.1bn)

Shares offered at IPO: 42,248,881 (60.4%)

Over-allotment exercised: - (4.2m shares authorized)

Shares outstanding: 70,000,000 (100%)

Market cap at listing: €1.4bn ($1.9bn)

Current market cap: €1.3bn ($1.8bn)

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Trading volume on Euronext Amsterdam, Brussels and Paris Share price

Current performance:

7.2%

1-day performance:

2.1%

http://www.google.nl/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=Cwd4OBBECBxqZM&tbnid=PKSyfLC0kNavuM:&ved=0CAUQjRw&url=http://en.wikipedia.org/wiki/File:Official_Euronext_logo.png&ei=-QOxU_voL8Gn0QX25YD4BQ&bvm=bv.69837884,d.ZWU&psig=AFQjCNEzBtKW8yBx00ojzLYyaRRqG12h-Q&ust=1404196214575431

Transaction highlights

Case study – The IPO of TSB Banking Group on LSE

TSB Banking Group had a buoyant debut on the London Stock Exchange with its IPO on 20 June 2014. With an offer price of £2.60, the pricing was set just above the midpoint of the initial filing range (£2.20 - £2.90), raising £455.0m ($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 £20bn of loans and customer deposits and 8,600 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 2009, 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 2013 to December 2015 but may be extended depending on market conditions. In 2012, the Lloyds Banking Group initially agreed to sell TSB to the Co-op Bank for £750m but Co-op pulled the deal in 2013 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 (70%) and a retail (30%) 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 FY2017, a 40-60% dividend pay-out ratio is expected.

Summary statistics

16

Trading on the London Stock Exchange (LSE)

Source: Dealogic, Thomson One, Bloomberg as of 30 June, 2014

Listing venue: London Stock Exchange

Country of incorporation: United Kingdom

Filing range: £2.20 - £2.90

Pricing: £2.60

Pricing date: 20 June, 2014

Trading date: 20 June, 2014

Money raised: £455.0m ($771.6m)

Shares offered at IPO: 175,000,000 (35%)

Over-allotment exercised: - (17.5m shares authorized)

Shares outstanding: 500,000,000 (100%)

Market cap at listing: £1.3bn ($2.2bn)

Current market cap: £1.4bn ($2.4bn)

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1-day performance:

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Pricing

Disclaimer

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PricewaterhouseCoopers Accountants N.V. is the author of this publication and has got the copyrights. Without written permission of PwC this publication may not be duplicated, copied, distributed or published. This publication has been prepared for information purposes and general guidance on matters of interest only, and does not constitute, or may not be interpreted as, professional advice or as a sale, buying or trading advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PwC does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.

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