Italy's Intercos pulls IPO as European listings falter
By Elisa Anzolin and Freya Berry
MILAN (Reuters) - Italian cosmetics company Intercos abandoned its public share offering on Thursday, blaming deteriorating financial market conditions that have forced other companies across Europe to re-think their listing plans.
The company pulled the plug on the offer after failing to fully cover its sale of shares worth up to 218 million euros (171.61 million pounds), one source said.
Its decision came just hours after French energy services group Spie announced it was scrapping its planned IPO, cancelling what would have been France's biggest listing since before the financial crisis.
On Tuesday, Italian Internet company Italiaonline pulled its planned listing on the Milan bourse because of adverse conditions and high volatility in the markets.
Intercos was founded in 1972 and makes cosmetics and skin-care products. It was seeking to list in Milan, saying it would use the proceeds to expand its business and cut debt.
However, sources had told Reuters on Wednesday that the sale was on a knife edge and on Thursday it dropped the offer.
"The company considers that sharply deteriorating market conditions in recent days will not allow for an accurate reflection of the company's intrinsic value and potential," Intercos said in a statement.
A banking source told Reuters that even with orders coming in from the United State, Intercos' book was not covered on Thursday.
The amount raised from IPOs in Europe quadrupled year on year in the first nine months of 2014 to a total $55.5 billion, but enthusiasm has cooled in recent weeks because of choppy market conditions.
The prospect of an interest rate rise in the United States and worsening economic outlook in Germany are among the reasons cited by analysts for an equities sell-off that has hit newly listed stocks and curbed investor demand for more offers.
'BUYER'S MARKET'
"This is a buyer's market, not a seller's. Why should I buy a stock with little visibility when there are lots of stocks out there with proven records," said Roberto Lotici, fund manager at Ifigest.
A statement to investors seen by Reuters said the Intercos offering was expected to be priced at 3.5 euros. That would have valued the company at about 384 million euros.
"Intercos is a group with very good fundamentals, but the IPO price is not the right one," Fidentiis analyst Alberto Checchinato said.
Intercos was aiming to list up to 44.18 percent of its capital. Of the 48.42 million shares it planned to sell, about 62 percent were owned by founder Dario Gianandrea Ferrari. The rest would have been newly issued.
"Right now the market is very volatile. And it is not positive to have so many IPOs all at once, because you can't look at all of them," another fund manager said, speaking on condition of anonymity. "The interest of foreign investors has been fading a little."
(Additional reporting by Stephen Jewkes, Francesca Landini and Oleg Vukmanovic; Editing by David Goodman and Crispian Balmer)
