Amundi’s €1.67bn IPO strikes the right note

Amundi’s head of Investor Relations Cyril Meilland has overseen the group’s initial public offering that took place in November.

Amundi’s chairman Yves Perrier rang the opening bell of Euronext Paris’ trading session on 12 November.

Over 166 million shares of Amundi’s capital were being traded for the first time. This proved a bright spot in a market that has seen the global volume of IPOs diminishing, particularly during the third quarter of 2015, and listings plans being either cancelled or postponed.

Amundi’s IPO is the largest listing the Paris stock exchange has seen in ten years. It involved 33,358,336 shares sold by Societe Generale, which totally sold down its stake in Amundi and 3,779,010 shares sold by Crédit Agricole as part of the exercise of an over-allotment option that allowed the firm to sell a maximum of 5,003,750 shares.

With a share price set at €45, the global offering’s value amounted to €1.67bn. Overall, 22.3% of Amundi’s capital was made available to investors (excluding further employee offering).

That IPO was enshrined in the shareholder pact between Crédit Agricole and Societe Generale, which was agreed at the creation of the asset manager in 2010.

Last July, the arrival of Cyril Meilland as head of Investor Relations sped up Amundi’s project, which he has overseen at every step of the way.

“Usually, the window for the launch of an IPO closes by end-November. To achieve this, we have met the various deadlines thanks to the team’s hard work,” Meilland says.

“Timing to launch Amundi’s IPO would have been even better last June when market conditions were more favourable, before the summer turbulence. We announced on 7 October an indicative price range which assessed a market cap going from €7bn to €8.8bn. We acknowledge the final price is in the lower part of the range but this reflects a more cautious market in a volatile environment,” he adds.

Amundi’s market capitalisation has been valued at €7.5bn. The environment remains favourable for the financial sector in which several equity managers spot opportunities.

But Amundi is not the only manager that apparently wants to benefit from the stock exchange spotlight. Dutch group ABN Amro was listed in Amsterdam two weeks after Amundi, after the Dutch government decided to sell its stake. And other managers may follow.

“The financial services industry is already well represented in the stock market. Adding one or two new stocks thanks to recent IPOs will not change the market much. However, Amundi offers an investment opportunity in a sub-segment, the continental European asset managers, which is under-represented compared to UK or US asset managers, and lacks large listed companies,” Meilland observes.

Regarding the initial share price, Meilland refers to common practice in France in terms of a new issuer pricing its stock in the lower part of the range (€42 to €52.5 for Amundi).

“The high end at €52.5 was to be reached only if the market had markedly improved between the disclosure of the pricing range and the final price. Pricing takes several things into account. A balanced price should be found for the stock in order to have a good quality book with investors investing assets for the long term instead of going for the quick buck.”

“Long term investors know that they are usually better allocated than short term ones, so they set lower limits to their orders. However, having a balanced price remains important because we need liquidity, and it is not good having all investors holding their stocks for a very long period,” he argues.

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