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Amsterdam vies for IPO spotlight as Brexit dents London’s allure



The decision by Polish ecommerce group InPost to pick Amsterdam for its stock listing offers the latest sign that London risks losing its grip as a trading hub after Brexit.

UK chancellor Rishi Sunak has referred to the hard break from the EU in financial services that kicked in on January 1 as “Big Bang 2.0″, a trigger for the City of London to flourish.

But bankers say Amsterdam is already showing potential to eat in to London’s pre-eminence as a European capital markets centre. Trading in EU shares fled London for EU centres including the Dutch city on the first day outside the single market at the start of 2021. Wednesday’s announcement by the Advent-backed parcel locker business suggests that initial public offerings may also gravitate towards where trading in European stocks is more lively.

“Looking at the options and the stock markets, Amsterdam looks very attractive because it seems that now that Euronext Amsterdam is becoming a kind of preferred tech companies listing stock exchange,” said Rafał Brzoska, InPost chief executive.

“Where in the past London was the default, we could see Amsterdam emerging as a new neutral listing place for IPOs, certainly for central and eastern European countries,” added Andreas Bernstorff, head of European equity capital markets at BNP Paribas, which advised on the InPost deal. “That is something that’s been accelerated by Brexit but also regulatory advantages in Amsterdam compared to London. We see that theme continuing.”

Euronext Amsterdam — part of a group of exchanges across the continent — handled just two IPOs last year, far behind London’s tally of 36, including dual listings, Dealogic data show. But one of the Dutch deals, for coffee conglomerate JDE Peet’s, was the biggest European listing last year and at €2.3bn, the largest since 2018. The lockdown-era deal in May was the first €1bn-plus listing executed virtually, with the roadshow taking just three days, down from a typical 14. Around 90 per cent of investment in the deal came from outside the Netherlands.

That flexibility and international reach for a large deal has provided evidence that the Dutch financial centre can absorb transactions that might otherwise have headed for London.

René van Vlerken, head of listings at Euronext Amsterdam, said his focus is on attracting listings and liquidity to the whole Euronext network, which spans countries including France, Portugal and Belgium, rather than only to the Netherlands.

“I’m not so much concerned about where the centre of the [European] capital markets union will be. I don’t care. I’m mostly concerned that the whole of Euronext can facilitate that,” he said.

London’s longstanding dominance of European finance is far from over even as it is being challenged, analysts have said.

“LSE remains the most international exchange for equity and bond issuers, traders and investors, and continues to be the financial centre of choice for issuance and trading within the pan-European timezone,” a spokesperson for the London Stock Exchange parent said. It is also urging the government to revamp listings rules to make the city a more attractive venue for fast-growing companies.

But for companies looking outside the UK, bankers think Amsterdam could have an edge over other European centres. “Choosing Paris or Frankfurt is more of a statement,” said one banker familiar with the InPost deal. Marginal differences in listing and governance rules in Europe tip in Amsterdam’s favour, he added.

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Mr van Vlerken is pushing the case for Amsterdam “very loudly”, he said, noting that companies had started to look beyond London before Brexit was completed. “We talk to issuers from Israel and from Africa that in the past, if they were going to do a listing in Europe, they would automatically go to London. There was a tradition and a history there. But that is already shifting,” he said.

“More and more companies from outside Europe looking at a listing are seriously considering Euronext as an alternative to London.”

London’s financial sector is effectively operating under a no-deal Brexit after the UK and EU failed to reach a deal on so-called equivalence, or mutual recognition on standards and regulation, before the UK dropped out of the single market and customs union at the end of 2020. That outcome had been anticipated by financial institutions on both sides, so it has not generated a large amount of disruption. It has, however, sucked EU share trading away from London overnight, in a reminder of how rapidly established trading norms can change.

For shares in dual-listed Just Eat, for instance, around 66 per cent of regulated trading headed to Amsterdam last year. That figure has already climbed above 80 per cent. That shift in liquidity helps to draw in new listings, said Mr van Vlerken.

Also on Wednesday, Just Eat said it had halted plans to delist from the Netherlands and focus on the UK. The company is reviewing all its listings as US rules demand the company is also traded on an American exchange following its $7.3bn purchase of Grubhub last year. Overshadowing its decision is a review by index compiler FTSE Russell, which may mean Just Eat is removed from the UK’s FTSE 100.

Mr van Vlerken believes any boost to the Netherlands owing to a lack of equivalence will prove fleeting. “Advisers and issuers are asking me about the lack of equivalence but I prefer to rely on our own strengths. The mutual benefits are too great for London to cut itself loose for the long term. In the end there will be some kind of resolution.”

The UK, however, has already shown it is willing to carve out its own path in financial services, splitting away from EU practices and rules. It is planning to bring trading in Swiss stocks back to London, in a break with an EU ban that prevailed before January’s full break with the bloc.

Additional reporting by Tim Bradshaw

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South Korean video game group behind hit ‘PUBG’ aims for $5bn IPO




The company behind global hit game PlayerUnknown’s Battlegrounds plans to raise up to Won5.6tn ($5bn) in an initial public offering that is expected to be South Korea’s largest ever.

Krafton said in a regulatory filing on Wednesday that it will sell more than 10m shares at Won458,000-Won557,000 each, with the top end of that range giving it a market capitalisation of Won28tn. The IPO price will be set on July 9 ahead of the company’s listing in Seoul on July 22.

The much-anticipated listing is likely to top that of Coupang, the leading South Korean ecommerce company that raised $4.6bn in New York in March.

Krafton, formerly known as Bluehole, was founded by Chang Byung-gyu in 2007. PUBG, a so-called battle royale game in which players fight to the death on a remote island, was released in 2017 and accounts for the bulk of Krafton’s revenues. The game has sold more than 75m copies across PC and consoles, while its mobile version has been downloaded more than 1bn times. Krafton’s operating profit more than doubled to Won774bn last year as sales jumped more than 50 per cent to Won1.67tn.

However, the company cited uncertainty in overseas expansion and domestic regulation as investment risks.

“Despite our successful experience in entering overseas markets, our past experience does not guarantee our future success given the different language, culture, custom and legal, regulatory environment,” Krafton said in its filing.

South Korea is on track for a record year for IPOs on huge retail investor interest. The benchmark Kospi index is trading near all-time highs, buoyed by ultra-low interest rates and the country’s strong economic recovery from Covid-19. Investment bankers have predicted that proceeds from IPOs will more than quintuple to at least Won25tn in 2021.

Other IPOs in the pipeline include LG Energy Solution, the world’s largest electric vehicle battery maker, which is expected to raise Won10tn-Won15tn in September. Hyundai Heavy Industries, a shipbuilder, is likely to raise $1bn-$1.5bn in August. Smaller deals include the IPOs of Kakao Pay and Kakao Bank, units of the country’s dominant messenger service provider.

“The Krafton IPO will be popular among investors, given investors’ growing interest in new growth areas such as EV batteries, games and online businesses,” said an investment banker close to the deal. “But the company is heavily reliant on just one game and it is uncertain how long the game’s popularity will last.”

Some analysts have raised concerns about Krafton’s high valuation based on its IPO pricing.

“Krafton’s valuation seems stretched, considering that its market cap will surpass NCSoft’s, although NCSoft is making more money than Krafton,” said a local analyst referring to one of the company’s competitors.

Krafton plans to use the IPO proceeds to develop new games, acquire other developers, enter markets including India and the Middle East and invest in technologies such as artificial intelligence.

After the IPO, Chang will hold a 14 per cent stake, followed by Chinese internet group Tencent with 13.2 per cent, according to company filings.

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IPOs / FFOs valued at £775m in London IPO




Shares in fell 8 per cent despite the company pricing them at the bottom of their range in its initial public offering on Wednesday, giving the online furniture retailer a market capitalisation of £775m.

The listing follows the recent debuts in London of online greeting card group Moonpig and vintners Virgin Wines, which have accelerated sales thanks to stay-at-home consumers buying online during the coronavirus pandemic. Both those groups’ shares remain well ahead of their IPO prices.

Deliveroo’s £7.5bn IPO was branded one of the worst In London’s history, however, after its shares — already priced at the bottom end of the range — fell as much as 30 per cent in initial dealings. They remain more than a third below their IPO price.

“It’s a bit disappointing,” said one banker not involved in the IPO, adding that the 200p a share pricing was “some way below the levels that had been talked about”.

Valuations of up to £1bn had been mooted in the run-up to the listing.

“It’s got a large addressable market and a lot of share to go for, but historically it has wrestled with achieving profitability and scale in the UK market and it has gone ahead and pushed into international markets despite that,” the banker added. sold 50m new shares in the IPO, raising £100m, while existing investors including co-founder Ning Li and Brent Hoberman sold 46.9m shares. A further 14.5m shares could be made available as part of the overallotment option. If exercised, that would increase the number of shares to 111.5m and 29 per cent of the issued share capital.

The shares traded conditionally in London on Wednesday, while full dealings will begin on Monday.

The homewares group aims to quadruple annual sales to £1.2bn by the end of 2025. The company has said it plans to invest proceeds from the IPO in marketing and supply chain improvements aimed at reducing the time between customer orders being placed and goods being delivered.

“The IPO is an exciting milestone for Made,” said chief executive Philippe Chainieux. “A listing in London, where the business was founded, will enable us to accelerate our growth.” generated £315m in sales last year. The group, founded by entrepreneurs Ning and Hoberman in 2010, sells to about 1.2m active customers in the UK, Germany, Switzerland, Austria, France, Belgium, Spain and the Netherlands and plans to expand beyond Europe.

After admission, growth-focused investors Level Equity and Partech will be the largest investors in the group, holding 14 and 11 per cent respectively, followed by companies linked to Ning with 8.8 per cent.

Fund management groups Majedie, Axa and NFU Mutual will also be top-10 shareholders, while a vehicle controlled by Hoberman will own 5.5 per cent.

The float is the latest in an increasingly active IPO scene for so-called digitally native businesses.

Victoria Plumbing is due to float on London’s junior market early next week, with pricing details expected on Thursday, while shares in German online fashion retailer About You began trading in Frankfurt on Wednesday and Berlin-based online optician Mister Spex announced its intention to float on Monday.

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Hong Kong tycoon Richard Li’s FWD to raise up to $3bn in US IPO




FWD, the Asian insurer founded by the son of Hong Kong tycoon Li Ka-shing, has filed for a US initial public offering in what would be one of the year’s biggest listings.

The company launched by Richard Li in 2013 said on Thursday the number of American depositary shares to be offered and the price range for the IPO had not yet been determined and the timing of the listing was subject to regulatory approval. But the company could seek $2-3bn from the share sale, according to people familiar with the situation.

FWD has expanded aggressively across Asia, rapidly rolling out a network across 10 countries including Japan, the Philippines, Vietnam, Singapore, Malaysia, Thailand and Cambodia.

The insurer has almost 10m customers, more than $63bn in assets and about 6,100 employees as well as 33,000 agents.

Richard Harris, a fund manager at Hong Kong-based Port Shelter Investment Management, said FWD “has made enormous gains [in market share] because it’s got a lot of firepower behind it”.

As with Li Ka-shing’s Cheung Kong conglomerate, FWD “takes a strategic view on industries and invests very heavily in them”, Harris said.

He added that it was “interesting” that the insurer had chosen to list in New York over Hong Kong, but US investors “will be interested [in FWD] and there does seem to be a slight thawing with the view towards Chinese companies — and this will be recognised in New York as a Chinese company”.

Li started FWD with the $1.2bn acquisition of ING’s pension and insurance businesses in Thailand, Hong Kong and Macau. The expansion strategy of Huynh Thanh Phong, FWD’s chief executive, has focused on pairing moves into new Asian markets with the use of technology to reduce the paperwork and complexity common to the industry in the region.

The group has swallowed up competitors as rival financial groups have retreated from the region, including MetLife’s Hong Kong business and the insurance business of Thailand’s Siam Commercial bank, the industry’s largest-ever takeover in south-east Asia.

“[SCB was] the prize asset that everybody wanted to go after,” Phong told the Financial Times in an interview this year. FWD eventually acquired SCB for about Bt93bn ($3bn) in 2019, giving it a 36 per cent market share in Thailand in bancassurance terms, bigger than the next three groups combined.

FWD has submitted a confidential filing for the IPO to the US Securities and Exchange Commission. That will allow it to submit other documents confidentially to the SEC before filing a prospectus publicly.

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