Dutch cable company, Ziggo said that it will be filing for an initial public offering to try to raise 745 million euros ($989 million) which would be the largest so far this year.
Ziggio is currently owned by private equity firms Warburg Pincus and Cinven and currently the agreement is to allow a float of 20% of its shares within the range of 16.50 euros to 18.50 euros. This growing trend of private equity firms cancelling partnerships to take companies private over the last 18 months can be attributed to Europe’s debt crisis which has hurt business in all sectors. These companies that are going public now are hoping that the worst is over with Greece which will make investors want to return to greater risk assets.
In a rare interview with Harvard Business School that was published online earlier this month, (it has since been taken down) value investor Seth Klarman spoke at length about his investment process, philosophy and the changes value investors have had to overcome during the past decade. Klarman’s hedge fund, the Boston-based Baupost has one of Read More
The company’s stock is expected to being trading on March 21st and it appears that management is optimistic about the IPO. “The launch of our I.P.O. is another major milestone for Ziggo and the level of ?interest we have already seen in the investment community is very encouraging,” said Bernard Dijkhuizen, Ziggo’s chief executive (NY Times).
Ziggio is comprised of three of the four largest cable operators in the Netherlands. The company sees growth potential in the local demand for high speed broadband internet and pay per view TV. So far the company has survived the Euro zone shocks with a reported revenue of 1.5 billion euros in the last year.
Assisting in the deal are JP Morgan and Morgan Stanley, who are the global coordinators for the IPO.
If you follow my writing you would know that I am somewhat skeptical of Europe. The European Central Bank’s plan to give ailing banks over 500 billion euros is a bit ridiculous to me, in that it will weaken the central bank and it may never see some of that money again. On the flip side, a bank default would not be ideal either.
Europe is turning into a takeover ground. Companies from all over are flocking to Europe to pick up ailing companies to add to their current business. Some businesses have been strong and continue to report good results during this difficult time for Europe. However, I am beginning to get skeptical on all this IPO fever around the world. These inflated valuations and stock prices can not be good for the market and could have some long term consequences, if we are not careful.