Aena IPO: Spanish market set for takeoff with Luton airport owner's float

 
Caitlin Morrison
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Adolfo Suarez Madrid-Barajas Airport, owned by Aena, is Spain’s largest airport

Luton airport's Spanish owner Aena priced its looming stock market blockbuster at the top of the range yesterday – underscoring a burgeoning confidence among investors and dealmakers about Spain’s rejuvenated capital markets and economy.

Aena, which will sell shares for €58 a piece to value the group at €8.7bn, has covered its books five times over as it prepares to list on the Bolsa de Madrid. One banker described the deal as “probably the blockbuster IPO in Europe for 2015,” yesterday with demand for the company’s shares said to have increased over the past few days. The group had originally intended to float in November last year, a deadline that was pushed back in October, amid reports of in-fighting among government ministers.
Worries around weak European economies were also said to contribute to the decision to delay – but three months later a different picture has emerged.
“There’s a real buzz around the Spanish capital markets”, a source close to the Aena IPO told City A.M., adding that country’s economy has been moving this way for some time.
Several market commentators point to a strong pipeline of Spanish deals due to take place over the next few months, with international conglomerate Abertis expected to float its telecoms unit later this year.
Advisers on the Aena listing are also upbeat on what it said about the European market in general. “You could only get the books covered like that, with that level of interest, when the market is strong,” said one.
The company runs 46 airports in Spain and also owns a stake in London’s Luton Airport, which yesterday reported record numbers of passengers in January, up 13 per cent compared with the same period last year.
In case there was any doubt that yesterday’s announcement signals a turnaround for Spain, the Aena deal is one of two major floats taking place this week, with building firm Actividades de Construccion y Servicios (ACS) set to list its renewable energy unit Saeta Yield in the next few days.
Elsewhere in Europe, companies are preparing for large IPOs, albeit not on the level of Aena’s: in France, workwear and linen company Elis is believed to have covered its books ahead of beginning trading this week, while Danish IT services firm NNIT announced its plans to float on Monday.
However, industry insiders warned that this buoyancy is not without qualifiers. While investor interest remains robust in Europe - according to a source “investors are sitting on cash piles” - there are a number of dormant issues which could erupt at any time. Commentators pointed to the situation in Ukraine, volatile oil prices, changes in monetary policy, and even the actions of terrorist group Isis, as factors that cannot be discounted.
On top of which, according to one banker, elections taking place in Spain, the UK, the US, and Argentina, as well as the recent Greek vote, have created a “very charged year politically”, which could bring the European market to its knees, depending on results. Given the potential for volatility across the continent, investment activity is likely to come in waves rather than a steady stream. For this reason, said the banker: “I wouldn’t say the market is red hot – but it is wide open.”

BEHIND THE DEAL

GOLDMAN SACHS RICHARD CORMACK
1 Cormack was the man GS sent out to bat against furious politicians when the Parliamentary business select committee grilled bankers over the Royal Mail IPO
2 He was made partner at GS in 2012 and is currently co-head of European equity capital markets, sharing his duties with Christoph Stanger. Before that he handled equity markets in the UK, Holland and new markets like central and eastern Europe
3 Cormack previously worked on the listings of Countrywide, CVC Credit Partners, Al Noor Hospitals and the 2014 float of online takeaway business Just-Eat
Also advising...
Lazard’s head of equity capital markets advisory Charlie Foreman, Henrik Gobel, managing director at Morgan Stanley, and Joaquin Arenas and Ignacio Maldonado, both from Bank of America Merrill Lynch, all worked on the deal

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