Private equity giant CVC set to launch €1.6 billion Amsterdam IPO

Private equity giant CVC set to launch €1.6 billion Amsterdam IPO

Apr 23,2024
CVC, which holds stakes in the Six Nations rugby and Lipton Teas, prepares to sell over 100 million shares after years of planning.
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CVC Capital Partners is seeking a valuation of €13 billion to €15 billion as it readies itself to go public on the Amsterdam Stock Exchange.

This means that 114 million shares, priced at €13 to €15 each, will become available to public investors, rather than being reserved for private buyers.

CVC is issuing 18 million new Shares, whilst the remaining 96 million are being sold by existing stakeholders.

Sellers include Singapore sovereign wealth fund GIC, the Kuwait Investment Authority, and the Hong Kong Monetary Authority.

Donald Mackenzie, one of the co-founders of CVC, is also expected to sell up to 10 million shares, which amounts to 1% of his 7% stake.

This could earn the Scottish financier up to €150 million.

Trading will begin this week, on the 26th April, after years of postponement.

The IPO has already been pushed back because of Russia’s invasion of Ukraine and Israel's offensive in Gaza, as CVC feared these events could hamper investment.

According to Reuters, Shares in the private equity giant have already been oversubscribed multiple times by investors.

CVC was first founded when it spun out of Citigroup in the early 1990s and it now manages assets worth €186 billion.

By launching the IPO, the firm hopes that extra funds can drive growth through the pursuit of new acquisitions, although some stakeholders have their reservations.

It is possible that, as a listed company, CVC’s priorities will change.

Public companies often face pressure from shareholders to deliver consistent financial performance and a stream of rewards, meaning that it can be trickier to focus on more long-term deals.

Another catch of launching an IPO is that listed firms attract greater public scrutiny, which can be uncomfortable for executives raking in large performance-based payouts.

That said, by selling Shares publicly, CVC is following in the footsteps of private equity firms like Blackstone, Bridgepoint, Blue Owl, and EQT.

EQT, which listed in Stockholm in 2019, has notably increased its fee-earning assets to approximately €130 billion, from about €40 billion at the time of its listing.

The IPO market as a whole is also picking up this year, after a slow 2023.

According to Ernest & Young, a majority of key IPO markets saw several newly-listed companies' current stock prices surpassing their offer prices in the first three months of this year.

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This reflects growing confidence amongst both issuers and investors.

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