(Bloomberg) -- Germany could see a wave of initial public offerings in Germany over the next two years as investors are keen to buy after a drought of transactions, according to Morgan Stanley.
“I expect as much as 10 large IPOs and would be disappointed to see less than five in Germany over the next 18 months,” Thomas Thurner, co-head of equity capital markets for Europe, Middle East and Africa at Morgan Stanley, told reporters in Frankfurt on Wednesday.
Recent conversations with investors have shown strong interest in European IPOs and they will likely have a fear of missing out into next year and the year after, Thurner said. “The IPO discount continues to fall absent negative surprises,” he said.
Germany has only hosted two IPOs this year, raising a total of $1.5 billion, according to data compiled by Bloomberg. Shares of perfume retailer Douglas AG, which went public in Frankfurt this year, have been down about 26% since its debut in March. The country isn’t alone in seeing a lull in IPOs. Across Europe, companies raised only $17 billion through first-time share sales so far this year, a far cry from the $105 billion raised during the boom in 2021.
More major M&As are due for Germany as well, according to Jens Maurer, head of investment banking for Germany and Austria at Morgan Stanley. Corporate spinoffs could be a source of those deals, while German firms could also explore potential deals in the US to fuel their growth, he said. US companies may find some of the German listed companies attractive as well, especially for the mid-cap ones, he added.
Maurer declined to name specific companies or provide a number for large deals he would expect, but indicated his bank’s pipeline is strong. “Watch me,” he said.
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