Two German companies — online mortgage broker Interhyp and solar wafer maker ErSol — completed their IPOs this week, Lehman Brothers conducted a daring Eu488m block trade in shares of pay-television company Premiere and Deutsche Bank placed 10% of property developer IVG Immobilien for two bank investors.
Market participants had expected the impasse over whether German Chancellor Gerhard Schröder or CDU leader Angela Merkel forms the next government to knock the stock market back and damage the prospects for share sales.
But equity investors appear confident — the Dax broke through the 5,000 point barrier this week for the first time for nearly 3-1/2 years and a spate of deals raised almost Eu900m.
The transactions suffered no apparent damage from the political uncertainty after Germany's inconclusive general election. On the contrary, investors wanting Germany to move towards a more strongly liberal economic model have been cheered by continued evidence of corporate restructuring — highlighted by DaimlerChrysler's plans to lay off 8,500 workers over the next year.
Deutsche Bank brought Interhyp's IPO on Wednesday and priced it, 30 times oversubscribed, at the top of the Eu36-Eu42 price range to raise Eu103.32m.
"It blew the doors off," said one syndicate banker. "People couldn't get enough of it: they liked the story, they liked the sector and they liked the timing."
The mortgage broker had a financing volume of Eu1.1bn during the first half of the year and Ebit of Eu4.1m, compared to Eu0.3m in the same period of 2004. Sales rose by 132% to Eu17m.
A total of 2.46m shares were sold in the deal, 700,000 of which were new and the rest sold by existing shareholders. There is a greenshoe of 355,000 existing shares. Around 10% of the deal was sold to retail investors.
Huge demand for ErSol
Deutsche then priced the Eu134.4m IPO of solar wafer manufacturer ErSol Solar Energy yesterday (Thursday) with a stunning 50 times oversubscription.
The 3.2m shares were offered at Eu36-Eu42 and priced at the top of the range. There is a greenshoe of 439,000 shares.
ErSol completed the acquisition of solar company ASi on July 1, giving it operations in another stage of the chain of solar cell production.
"This was a great time to do the IPO because the sector is hugely in vogue among investors, given concerns about the energy market," said the syndicate banker. "It was also a great time for ErSol: by acquiring ASi the company guaranteed access to silicon, which is the crucial component in solar cell production."
A total of 3.65m shares were sold, of which 2.95m were new shares, issued to finance increasing production.
Existing investors, including lead investor Ventizz, a German venture capital firm, sold 703,346 existing shares.
Deutsche Bank was in action again yesterday when German private bank Sal Oppenheim and HSH Nordbank each sold 5% of IVG Immobilien as they shed non-core assets.
"There is a feeling that the property market has bottomed out in Germany and an improvement is imminent," said the banker.
The shares were marketed at Eu16.30-Eu16.70 on Thursday, after the stock had closed at Eu17.62 on Wednesday. The pricing of the placement had still not been made public last night. The stock closed 3.68% down on the day, at Eu17.
Sal Oppenheim owns 20% of IVG after the sale and HSH Nordbank 5%. Both have a lock-up of six months on further share sales.
Premiere risk trade
A day earlier, Lehman Brothers had conducted an audacious risk trade in pay-television company Premiere that raised around Eu488m.
The deal reduced the combined stake of private equity house Permira and HVB Group, BayernLB and Bawag from 33.8% to 8.45%.
The 20.76m shares were marketed at a range of Eu23.75-Eu24.25, according to market observers, and most bankers believe they were underwritten at Eu23-Eu23.50.
The consensus among bankers was that the stock was probably placed at around Eu23.50, compared with a close of Eu24.51 on Wednesday — raising around Eu488m. On Thursday the stock closed at Eu23.40.
Some bankers have suggested that part of the trade was still on Lehman Brothers' books. Syndicate bankers at Lehman did not return calls.
Laurence Neville
