Fincantieri Restless for Growth in Optimistic Market

By MarEx 2014-06-15 17:13:00

UniCredit's online bank Fineco and state-owned shipmaker Fincantieri launch their initial public offerings (IPO) on Monday, adding to the list of Italian firms seeking to tap investors' growing confidence in Europe's economic recovery.

The two IPOs are together worth up to 1.5 billion euros ($2 billion) before the possible exercise of over-allotment options that could increase the sum raised.

The number of new shares issues has picked up across Europe in recent months, spurred by an improved economic outlook and rising equity markets, thanks in part to ultra-loose monetary policy. As of May 29, total IPO share issuance in Europe this year was $25.3 billion from 85 deals - more than triple the same period of 2013, according to Thomson Reuters data.

Italy and other southern European countries that were hit hard in the euro zone debt crisis have been among the main beneficiaries of renewed investor enthusiasm, as emphasized by government bond yields now hovering at record lows.

Italian asset manager Anima successfully completed its flotation after a 690-million euro share sale in April, while business credit data provider Cerved is in the middle of its own offering for around half a billion euros.

Further down the line, Rome is hoping to cash in between 4 and 5 billion euros from the market listing of a 40 percent stake in the post office expected by the end of the year.

Fineco and Fincantieri come to the market as troubled bank Monte dei Paschi di Siena's 5-billion euro rights issue enters its second week. Another lender, Carige, launches its own 800 million euros share sale on Monday.

"The situation seems favorable, there is a lot of liquidity around so I don't foresee any particular problems," Fineco CEO Alessandro Foti said in a recent presentation to journalists.

The unit of Italy's biggest bank by assets is listing a 30 percent stake in an IPO that values it at up to 2.67 billion euros, and helps its parent bolster its balance sheet amid a pan-European health check of lenders.

UBS, the global coordinator of the listing, said in its report for investors that Fineco was geared towards two of the main growth trends in the financial industry: digitalization of banking services and increased focus on asset management.

Fineco, the largest online broker in Europe by number of executed orders, aims to tap further into the Italian market, where 3.7 trillion euros of household wealth are invested in financial assets. That is around 40 percent of total household wealth compared with 60 percent in other major economies.

Fineco's shares will be offered at between 3.5 and 4.4 euros apiece from June 16 to June 26. If the over-allotment option is fully exercised, a further 4.5 percent of Fineco will be floated, bringing the free float to 34.5 percent.

Also aiming for a July market debut is Fincantieri, whose share sale opens a new round of debt-cutting privatizations by the Rome government.

Fincantieri, which makes vessels ranging from luxury yachts to military aircraft carriers, will offer a stake of up to 38.2 percent, mostly via a new share issue, at a price range between 0.78 euros and 1 euro per share.

That values the company, based in the northeastern port city of Trieste, at between 1.57 billion and 1.84 billion euros, and the initial public share offering at up to 704 million euros.

The proceeds of up to 600 million euros from the new share issue will be used to bolster Fincantieri's finances, meaning the Italian treasury does not stand to gain much from the sale.

No private investor can hold more than 5 percent in the company, the world's fourth-biggest shipmaker and a rare example of successful restructuring in the industry.

"We want to grow, we are number four in the world, the number three is South Korean and it's twice our size," Fincantieri Chairman Vincenzo Petrone said on Friday.

"There is quite a number of us tapping the market for investment. We believe we are a very interesting pick."

($1 = 0.7345 Euros)

Copyright Reuters 2014.

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