Markit Heads to IPO Market, Wall Street BrokerDealers All Smiles

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wsj logoBelow BrokerDealer.com blog news extract courtesy of the Wall St. Journal.

One of the biggest financial service industry IPOs of the season (as well as any other industry initial public offering of the season) is scheduled to launch on Thursday, and, as noted by the WSJ, Wall Street’s biggest banks are in line for a payday of up to a billion dollars from Markit Ltd.’s share float, as they cash out part of their stakes in the financial-data firm and divvy up the underwriting fees.

The 12 financial institutions that rank among the London company’s top shareholders expect to raise as much as $1.02 billion selling shares Wednesday at as much as $25 apiece, a rare bit of good news at a time of sluggish revenue, soft trading activity and regulatory scrutiny. The largest sellers are expected to be Bank of America Corp. BAC 0.00% , Citigroup Inc. C +0.29% and Deutsche Bank AG DBK.XE +0.49% , with Bank of America selling seven million shares to raise up to $176 million, according to filings.

The firm’s largest holders—an employee-benefits trust, private-equity firm General Atlantic and Singapore state-owned investment company Temasek Holdings Pte Ltd.—aren’t selling their shares, according to regulatory filings. The Canada Pension Plan Investment Board is considering buying $450 million worth of the shares, the filings said.

The offering, which begins trading Thursday, could give the financial-information company a $4.5 billion market value, highlighting Markit’s evolution in the years since the financial crisis and investors’ thirst for data on derivatives, bonds, loans and foreign-exchange markets.

“Markit started with a great idea, which was to create a central pricing service in what were at the time very rapidly growing credit markets,” said Mark Beeston, a former board member and founder of financial-technology venture-capital firm Illuminate Financial Management.

At the same time, the banks that have backed Markit since its founding more than a decade ago have been jockeying for position in selling the offering to the public. The deal is expected to raise as much as $1.1 billion altogether.

The company and the banks are discussing a fee pool of about 4% on the IPO, which would amount to as much as $45 million if the deal is priced at the top of the range, people familiar with the matter said.

The banks skirmished over their roles as the IPO was in its planning stages, according to some of the people familiar with the matter.

For the full story, please click here to visit the WSJ.

Swedish Cable Company Com Hem Raises $853 Million in Initial Public Offering.

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BrokerDealer.com/blog update courtesy of extracts from today’s NYT DealBook

LONDON – The Swedish cable company Com Hem Holding said on Tuesday that it raised 5.67 billion Swedish kronor, or about $853 million, in its initial public offering on the Nasdaq OMXStockholm exchange.

Com Hem, which was acquired by the private equity firm BC Partners in 2011, priced its offering at 58 kronor a share, giving it a market capitalization of 11.5 billion kronor. Shares of Com Hem rose 8.8 percent, to 63.10 kronor, in trading in Stockholm on Tuesday morning.

Com Hem is the largest cable company in Sweden, with around 1.8 million connected households. It could receive additional proceeds of up to 567 million kronor if an overallotment of shares in the offering is fully exercised.

BC Partners, which did not sell shares in the I.P.O., remains the company’s largest investor, with a 50 percent stake. It would hold a 47.7 percent stake if the additional allotment were sold.

“With the support of our new shareholders, we are in a strong position to move forward and to grow our business,” Anders Nilsson, the Com Hem chief executive, said.

Com Hem plans to use the proceeds to reduce debt and to give it more financial flexibility.

The I.P.O. comes at a time of consolidation in Europe’s telecommunications industry.

Vodafone of Britain, Telefónica of Spain and other large players have announced acquisitions in the last 18 months as Europe’s largest carriers bolster their offerings by purchasing cable and fixed-line assets to complement their mobile networks.

Com Hem, founded in 1983, also provides broadband and telephone services. It was spun out of Sweden’s former telecommunications monopoly and counts 39 percent of all households in the country as customers.

The company posted net revenue of 4.4 billion Swedish kronor in fiscal year 2013 and employs about 950 people.

The full article can be found at NYT DealBook.

BrokerDealers & Bankers Cashing In on IPO Boom

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Below Brokerdealer.com blog news extract courtesy of FT.com

Investment banks are cashing in on a boom in global stock market listings this year amid a resurgence of initial public offerings from Europe and Asia. Worldwide IPO fees of $3.15bn for the year to date are up nearly two-thirds from the same period a year ago, according to Thomson Reuters and Freeman Consulting.

The amount garnered in the Americas has risen slightly from $1.25bn to $1.31bn. Fees from these deals in the Asia-Pacific region jumped by almost three times to $853m, and more than doubled in Europe.

IPOs have been a bright spot for banks as volatility in secondary markets vanished, putting pressure on trading revenues. The CBOE Vix equity volatility index this month fell to a seven-year low.

The listings market in the US has been strong for a few years, experiencing a pullback this spring after overheating at the start of the year. Stabilisation in southern Europe has served as a catalyst for a rebound in deals throughout the continent, while Asia has been choppy.

“When you see sovereign yields in Greece and Spain fall, it allows people to put good values on any solid European company that may want to go public,” said Dan Simkowitz, co-head of global capital markets at Morgan Stanley.

The calendar is not necessarily dominated by southern Europe, but influenced by the “healing”, he said.

The IPO revival in Asia and Europe has clipped the global market share of fees for top earning banks as those with a strong regional presence in rebounding areas, such as UBS in Asia, move up the charts.

Sam Kendall, global head of equity capital markets at UBS, said: “Investors in Asia’s market are not just buying anything. The deals have to be priced sensibly, structured properly and have a good equity story. It’s the same thing all over the world.”

In Europe, the rush to list has been led by London where smaller banks such as Zeus Capital and Numis have used strong local profiles to gain market share against much larger competitors.  For the complete story, please visit FT.com

Its a Beautiful World; Paris-based Worldline IPO

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Below Brokerdealer.com/blog news extract courtesy of FT.com and reporter Andy Sharman

Worldline, the online payments company being spun out of French multinational Atos, has launched its initial public offering at a range that values the company at up to €2.4bn, including debt.The Parisian listing is part of a plan to take advantage of the shift to digital and mobile that has increased the popularity of online payments – though cashless transactions have not caught on as rapidly as some had hoped.

Gilles Grapinet, Worldline chief executive, said the IPO came at “a unique moment of opportunity for growth” with the convergence of three trends – “the digital and mobile revolution, the changes in the regulatory framework for the European payments sector and the shift in strategy by many banks following the financial crisis”.

Specifically, he was referring to banks’ willingness to invest in technology that lowers the costs of transactions.
Worldline, which has revenues of more than €1bn and employs 7,200, specialises in mobile payments for retailers and transport companies, payment processing software for banks and other cashless systems, such as loyalty cards, for hoteliers.
Worldline plans to raise €610m in its IPO, more than half of which will be used to repay a loan to the parent company. Atos plans to keep a controlling stake.The offering has been priced at an indicative range of between €16.40 and €20 a share, implying an enterprise value of €2bn to €2.4bn. Worldline, whose headquarters are in the Parisian suburb of Bezons, filed its document de base – the first step towards flotation – with French regulators at the start of May.
Deutsche Bank and Goldman Sachs are acting as global co-ordinators and joint bookrunners alongside Bank of America Merrill Lynch, Barclays, BNP Paribas and Société Générale. Rothschild is financial adviser to the company.

IPO of the Day: Playing Chicken in Stockholm via Scandi Standard

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BrokerDealer.com/blog news courtesy of Reuters -

Scandinavian food company Scandi Standard said on Monday it would launch an initial public offering in Stockholm that would give it a market capitalisation of up to 2.4 billion Swedish crowns ($361 million).

The company, which makes food products based on chicken and had adjusted EBITDA earnings of 479 million crowns on pro forma sales of 5.2 billion last year, said its shares would be sold at 33 to 40 crowns each.

If the owners decide to increase the offering in full and if the over-allotment option is fully exercised, it will comprise 39.6 million shares, representing 65 per cent of the total number of shares in the company.

Scandi Standard is owned by London-based private equity firm CapVest and Swedish farming association Lantmannen.

Link to full statement: r.reuters.com/hyh22w

($1 = 6.6448 Swedish Crowns) (Reporting by Sven Nordenstam)