We don’t hear much from stock market debutant Theon, but since the IPO three weeks ago the price has quietly shot up by 16%. This could well be the prelude to more IPOs on the Damrak, expects René van Vlerken, head of Listings at Euronext Amsterdam.
On February 7, the Cypriot company Theon, manufacturer of night vision goggles for defense, among other things, made its debut on the Amsterdam stock exchange. It was the first traditional Initial Public Offering (IPO) since Ebusco’s in 2021, if we don’t count SPACs, direct listings and second listings of foreign companies.
This IPO could well be the prelude to more IPOs. In 2022 and 2023, relatively few companies made an appearance at Beursplein 5 in Amsterdam, but 2024 will hopefully be a better year in that respect, says René van Vlerken, head of Listings at Euronext Amsterdam. “I am optimistic about the year ahead,” he shares during a roundtable discussion in the stately boardroom of the stock exchange.
According to him, there are some interesting IPOs in the pipeline. He does not mention names or numbers, but it is already known that Ahold Delhaize subsidiary Bol.com and HAL subsidiary Coolblue have ambitions for an independent listing and investor CVC is also reportedly interested.
‘IPO climate is recovering’
According to Van Vlerken, the IPO climate is recovering. The economy is recovering from the trough, inflation is on the decline, interest rates are stabilizing and corporate profits are strong: ingredients that make it interesting for companies to apply for a stock exchange listing. The fact that Theon shares have fared well since the IPO also helps: the price is now more than 16% above the opening price.
The enthusiasm for going public can also get a boost from new European regulations that are in the making. In an IPO, these rules shorten the period between the moment of publication of the prospectus (opening of the bookbuilding) and the closing of the bookbuilding (pricing/allocation). Now it still takes six working days, but that period will be halved after the introduction of the so-called Listing Act.
“Such a period of six days is very long. “Anything can happen in the meantime, which could cause the IPO to fail,” Van Vlerken explains. “If that period is shortened to three days, that risk becomes smaller. That can remove the barrier for potential stock exchange participants.”
This would also be good news for private investors, who are sidelined in many IPOs, such as Theon.
Van Vlerken urges potential fair goers not to wait too long. He points out that this year there will be elections in approximately 70 countries, including the United States. A renewed battle between Joe Biden and Donald Trump could lead to instability and political uncertainty. Investors don’t like that and it can hurt stock market sentiment.
Expatregeling
Amsterdam can especially look forward to interest from foreign companies. Exor, the investment company of the Italian Agnelli family, the South African tech investor Prosus, the Spanish builder Ferrovial and the Polish postal locker operator InPost have all found their way to the Damrak.
This is partly due to the still favorable business climate, Van Vlerken believes. According to him, the Netherlands has a lot to offer companies, for example in attracting new talent, regulations and tax matters. “But it is important that we do not lose our appeal,” warns Van Vlerken.
He is referring, among other things, to the expat scheme (a tax discount for expats), which is being simplified. ASML recently threatened to move abroad for further growth if it becomes difficult to find qualified personnel due to restrictions on study and labor migration.
Seven scholarships
More than 1,900 companies are now listed on one of Euronext’s seven stock exchanges. This includes more than 700 technology companies.
Each of the seven stock exchanges – in addition to the Netherlands, these are Belgium, France, Portugal, Italy, Ireland and Norway – has a unique platform that attracts a certain type of companies. “Companies in the maritime sector and fish processing usually choose the Oslo stock exchange. Brussels is popular with biotech companies and international companies often choose Amsterdam.” According to Van Vlerken, this combination of stock exchanges makes Euronext attractive for companies.
The stock market must compete with investors with deep pockets. “Start-ups have different options to raise capital. They can go to the stock exchange, but they can also contact a private equity company, for example,” Van Vlerken explains.
Euronext Amsterdam actively seeks discussions with companies to inspire them to consider an IPO, including through educational programs such as IPOready. And once a company is listed, the stock exchange assists entrepreneurs with advice and resources to make optimal use of the opportunities offered by the capital market.
Exodus of companies
There are also plenty of options for IPOs delistings. The Amsterdam stock exchange has seen the departure of many high-profile companies in recent years, such as Boskalis, Intertrust, Ordina, Neways, TMG, Wessanen, Imtech, Batenburg Beter Bed, Groothandelsgebouwen, Ten Cate and Binckbank. Hydratec (formerly Nyloplast) will soon follow, which will be delisted from the stock exchange by the Ten Cate family.
This does worry Van Vlerken. “Some of the companies that are disappearing have been swallowed up by private equity companies. But there is also a part that struggles with a lack of liquidity.” This means that there is too little trade in it.
“Some indexes are dominated by a handful of blue chips, including investment funds that have switched from small to large caps,” Van Vlerken explains. “Unfortunately, we have no control over that.”
Also read: Bols and Brill from the stock exchange: what do they get in return?
2024-02-28 08:58:26
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