Unlock the Editor’s Digest totally free
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly publication.
Spanish magnificence group Puig is aiming for a top-of-the-range valuation of practically €14bn in its preliminary public providing due on Friday, signalling sturdy demand in a deal set to be Europe’s largest market debut this yr.
Any bids from buyers coming in at under €24.50 per share — equating to a market capitalisation of €13.9bn — “risk missing” out on the provide, in accordance with phrases distributed by Puig’s bankers. Puig stated this month that its anticipated valuation vary was €12.7bn to €13.9bn.
Demand from buyers is exceeding the dimensions of the deal, in accordance with these engaged on it, with the corporate aiming to promote as much as €3bn of shares.
A robust itemizing for Puig would construct momentum in Europe’s IPO market, after European personal fairness group CVC Capital Partners noticed its shares leap on its first day of buying and selling final week following a long-awaited IPO.
Puig’s bankers stated the corporate would promote 21.5 to 23.7 per cent of its shares, with the remainder remaining within the palms of the Puig household, which based the corporate 110 years in the past.
Puig is predicted to finalise its provide value on Tuesday, earlier than its shares start buying and selling on Friday. JPMorgan and Goldman Sachs are main the IPO.
Puig’s launch on public markets comes at a fancy time for the world luxurious trade, the place development is slowing from a multiyear increase interval through the pandemic. Chinese customers, particularly the center class who helped gas the trade’s latest enlargement however are additionally extra uncovered to financial pressures, are shopping for much less because the outlook within the nation deteriorates.
Sales figures from the primary quarter of the yr confirmed a large divergence in efficiency between high luxurious teams, with these extra oriented in direction of rich customers faring higher. Puig, which owns luxurious labels Rabanne and Carolina Herrera in addition to a clutch of make-up and skincare manufacturers, elevated revenues 19 per cent on a like-for-like foundation final yr to a complete of €4.3bn.
However magnificence and perfume, which makes up the vast majority of Puig’s enterprise, has proved resilient with even squeezed customers nonetheless keen to splash out on extra reasonably priced lipsticks and perfumes. Companies comparable to LVMH’s magnificence retailer Sephora and sector chief L’Oréal beat expectations firstly of the yr, easing investor considerations a couple of slowdown within the US, magnificence’s greatest market.
However, latest magnificence IPOs haven’t been simple, with the market debut of German fragrance retailer Douglas flopping in March, with shares nonetheless buying and selling under their preliminary itemizing value.
https://www.ft.com/content/4ef72c3c-92e0-468a-b48a-3b14352bb6f3