News
UK financial firms spark IPO optimism as Europe’s recovery falters
(Bloomberg) — Potential initial public offerings from a string of U.K. financial services companies could fuel the next stage of Europe’s recovery after the pace of new listings slowed sharply.
Most read on Bloomberg
Such hopes were raised after Bloomberg reported that backers of Canopius Group are exploring an IPO for insurance company Lloyd’s of London. An IPO is also among options being mulled by Banco Santander SA for its U.K. payments subsidiary Ebury, Bloomberg reported.
Meanwhile, the publication of Revolut Ltd.’s annual accounts has sparked talk of an IPO at some point in the future. The British challenger bank said it was aligning its “financial processes with the standards expected of publicly listed companies.” Having previously said it would not consider listing in London, Revolut appears to have softened its stance since then.
IPOs by these companies would be a shot in the arm for a market that has been flagging after a relatively bright start to the year. With 13 billion euros ($14.1 billion) in IPOs, it was Europe’s best first-half performance since the IPO boom of 2021, but that figure is only a quarter of the amount raised three years ago, data compiled by Bloomberg show.
Hopes for a second-half recovery were dashed when sneaker maker Golden Goose Group SpA shelved its IPO in Milan, and clothing retailer Tendam reportedly postponed plans to list in Madrid.
Adam Cox, head of capital markets at PwC UK, said financial companies were ideally placed to take advantage of investor demand for new shares as they were profiting from high interest rates and improving economies.
“The UK also has a strong reputation in financial services, which underpins some of the activity here – when the equity story focuses on a UK-based business with domestic or international growth plans, there will be a substantial pool of investors in the London market,” Cox added.
In 2021, London had a 25% share of the European IPO market — the largest of any city — but this year, its only notable new listing was a £166 million ($211 million) deal with computer maker Raspberry Pi. Online fashion retailer Shein has filed confidential documents for an IPO in the U.K. capital, but the company is still awaiting approval from Chinese regulators, Bloomberg News reported in June.
The story continues
Listings of financial services names could well fill the gap, especially if stock markets stabilize after a period of turbulence. Carlton Nelson, head of corporate broking and PLC advisory at Investec, said he remained optimistic.
“I believe we will see further IPO momentum building throughout the remainder of 2024 as issuers take advantage of the current low volatility environment, ahead of a broader market recovery in 2025,” Nelson added.
Most Read from Bloomberg Businessweek
©2024 Bloomberg LP