IPO Roundup March 10, 2016

Is the IPO market about to finally open up?

It’s been a long, dry spell. The IPO window has been closed since mid-December, with the exception of a small handful of biotech companies. It has been the victim of poor returns — 70 percent of the IPOs last year are trading below their IPO price — and the market downturn from December through mid-February.

But that may be changing. The two most important indicators of the near-term IPO market — recent IPO prices and the overall market — have dramatically turned around. Consider: 

Fashion group SMCP plots IPO as Chinese deal hopes fade | Reuters

SMCP, the French company behind fashion brands Sandro, Maje and Claudie Pierlot, is aiming to list shares in Paris by the summer after buyout talks with Chinese textile group Shandong Ruyi failed to come to fruition, sources told Reuters.

SMCP, controlled by private equity firm KKR (KKR.N), unveiled plans for an initial public offering on Tuesday, market conditions permitting. Sources said it was aimed for a valuation of more than 1 billion euros ($1.10 billion).

Sandro, Maje and Claudie Pierlot, which sell dresses priced at around 200 euros, operate in what is classified as the accessible segment of the luxury market. That sector has been benefiting from buoyant demand among fast-growing middle classes, particularly in countries such as China. 

BATS Global Markets 2015 Profit Surges 67% Ahead of IPO – WSJ

BATS Global Markets Inc.’s profit surged in 2015 as the exchange operator prepares to go public this year, roughly four years aftertechnical woes forced it to cancel plans to go public.

Over all, BATS reported profit of $82.2 million, or $2.51 a share, compared with $49.2 million, or $1.55 a share, a year earlier. Excluding about $8.2 million in acquisition-related charges, $1.5 million in costs tied to its initial public offering and other items, profit was $3.17 a share, up from $2.37 a share a year earlier.

Revenue rose 22% to $1.78 billion.

The Lenexa, Kan.-based exchange operator makes the bulk of its revenue from transaction fees. 

IPO reform ‘suspended or delayed’ | Shanghai Daily

CHINA is still “researching and discussing” the registration-based initial public offering system, Li Chao, vice chairman of the China Securities Regulatory Commission, said yesterday.

Speaking to reporters on the sidelines of the annual session of China’s national political advisory body, Li explained that the implementation of the system is a complex process because the market is very sensitive to the issue.

China’s top legislature has granted a two-year window starting from March 1 for the country’s top securities regulator to revamp the IPO system to make it easier for companies to go public. 

Initial public offerings: What investors should know about the IPO market

Investing in initial public offerings (IPOs) can be a good way for investors to “get in on the ground floor” with a new public company. But it can be hard to tell which IPOs are going to succeed and grow, and which will crash and burn.

Savvy investors who find the right opportunities can be rewarded. While individual performances varied, the average increase in share price across all new IPOs by the end of 2015 was 10 per cent, compared to the ASX 200 which fell 2 per cent over the year.

Nonetheless, the IPO market in recent years has been particularly hard to predict as there have been several new trends emerging. 

Matrix puts IPO on hold – The Economic Times

Matrix Cellular, the Delhi-based international travel services provider, will not launch its Rs 500-crore initial public offering (IPO) till the market stabilizes, its top executive said, adding that the company is in no hurry as it is well funded.

“I have always had this worry that you can have this [IPO], but what if a day before your IPO, if the market tanks heavily the way it has happened lately, then who is going to subscribe to your IPO,” Managing Director Gagan Duggal told ET. 

BAIC Said to Seek $460 Million, Plan Electric-Car Unit IPO – Bloomberg Business

BAIC Group is seeking to raise about 3 billion yuan ($460 million) in a financing round for its electric-car business, with plans to sell shares in the unit on Shanghai’s exchange for emerging companies, according to people familiar with the matter.

Beijing Electric Vehicle Co., which is 60 percent controlled by BAIC, has attracted investments from technology companies including Le Holdings (Beijing) Co., said the people, who asked not to be identified because the information is confidential. BJEV, asthe unit is called, plans to use the funds from the initial public offering to cut debt, make investments and as working capital, according to the people. 

What Shake Shack can tell us about the IPO market

Shake Shack reported better-than-expected earnings in its fourth-quarter results, but that wasn’t enough to satisfy investors.

A weak outlook for fiscal 2016 sent shares down over 10 percent in after-hours trading Monday. The NYC-based burger chain expects same-store sales at existing restaurants to rise between 2.5 and 3 percent in 2016, slightly worse than what Wall Street had been anticipating. Investors have been concerned that Shake Shack won’t be able to justify its staggering valuation of 100 times earnings. 

ASX listing rule forces Bitcoin Group to pull out from IPO | ZDNet

Bitcoin Group has scrapped its long awaited plans to become the world’s first publicly floated bitcoin mining firm.

The Melbourne-based company’s initial public offer (IPO) closed on January 25, with the company’s first day of trading on the Australian Securities Exchange (ASX) originally scheduled for February 2, 2016. Instead of trading, however, Bitcoin Group is now returning the AU$5.9 million it raised to investors.

“The key reason for the withdrawal of the offer is due to the requirement of the ASX, that Bitcoin Group procure a working capital report from an independent accounting firm, a report not specifically required for a listing on the ASX,” Bitcoin said in a letter to investors. 

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