(Bloomberg) -- A prospective investor in Europastry SA’s halted initial public offering called for a tighter pricing discount to one of the company’s listed peers.
“The discount to Aryzta AG this second time around was very small, even at the bottom of the range,” said Michael Gierse, a portfolio manager at Germany’s Union Investment, which oversees €479 billion in assets.
“I think if they wanted to come back again they would need a 40% discount to Aryzta,” he said. “It’s a buyers’ market.”
The Barcelona-based company’s offering was set to consist of €210 million ($230 million) in new equity being raised by the company and as much as €295 million of stock sold by existing shareholders, including the founding Galles family and buyout group MCH Private Equity.
At the top of its marketed price range, a deal would have valued the business at €1.51 billion, according to terms seen by Bloomberg.
Another investor echoed Gierse’s concerns, deciding not to participate in the IPO given the targeted valuation, the person said, asking not to be identified as the information isn’t public.
A representative for Europastry declined to comment.
The producer of frozen baked goods cited geopolitical uncertainty for the decision to hold off on its planned offering, according to a statement. Europastry and its owners would continue to assess the possibility of a float when market conditions allow, the statement showed.
Other European companies that successfully listed this year on their second attempt, such as Renk Group AG and Planisware SA, came back with fixed-price deals at the bottom of their original range and with cornerstones committing to take up large chunks of stock.
The broader European IPO market remains open, Gierse said.
“If there are good companies, with a good strategy they can still do an IPO,” he said.
Europastry considered reducing the size of its IPO in a last-ditch attempt to complete the transaction, Bloomberg News reported Tuesday. It had called off an earlier attempt to go public in June.
Last week, German academic publisher Springer Nature saw its shares rise on its market debut following Europe’s first sizable IPO this autumn. BC Partners-backed Springer came to market with a reduced valuation and priced the IPO just above the middle of its marketed range.
Polish convenience store Zabka Group SA is likely to price its IPO at the top of its valuation range, according to terms seen by Bloomberg.
Some European mid-cap companies have had to put their IPO plans hold this year. Italian sneaker marker Golden Goose SpA postponed its IPO around the time of Europastry’s first attempt blaming a bout of market volatility spurred by EU parliamentary elections.
--With assistance from Macarena Muñoz.
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