The IPOX® Update 12/14/2024

Europe

Canal+ Plans London IPO Amid UK Market's Listing Challenges

French streaming company Canal+ is preparing for an initial public offering on the London Stock Exchange, targeting a valuation between €5-6 billion ($5.3-6.4 billion). The listing would mark London's largest new listing since 2022, providing a boost to the city's struggling IPO market. The announcement comes as Ashstead Group, a UK construction equipment rental firm, revealed plans to shift its primary listing to New York, following similar moves by CRH Plc, Flutter Entertainment, and chipmaker Arm Holdings. Ashstead cited better access to US investors and alignment with its US-focused operations as reasons for the transition. In response to these challenges, London regulators have implemented measures to ease listing rules and attract more companies. UK investment banks report improving IPO market conditions, with growing confidence extending into 2025. (Source)

Shein's London IPO Faces Regulatory Scrutiny Over Supply Chain Concerns

The UK Financial Conduct Authority (FCA) is delaying approval for Shein's London IPO following challenges from advocacy group SUG regarding supply chain concerns. The fast-fashion retailer, valued at $66 billion with projected 2024 revenue of $50 billion, faces scrutiny over allegations of Xinjiang cotton usage in its supply chain. Despite implementing isotopic testing and ESG measures, the company reported two child labor cases in 2023. The FCA faces pressure to balance reviving IPO activity while ensuring human rights compliance. While SUG maintains the possibility of a judicial review, legal precedent suggests such challenges may face difficulties in succeeding. (Source)

Asia-Pacific

Orion Breweries Prepares for Tokyo Stock Exchange Listing

Okinawa-based Orion Breweries is planning to list on the Tokyo Stock Exchange in the first half of 2025, with an expected offering size of approximately $200 million. The company, which produces alcoholic beverages, soft drinks, and operates tourism businesses, was jointly acquired by Carlyle Group and Nomura Capital Partners in 2019 for $373.7 million. Recently, Japanese railway operator Kintetsu Group Holdings purchased a 10% stake in the company. Founded in 1957, Orion Breweries has appointed Nomura and Mizuho as advisors for the IPO, which aims to support growth in its beverage, tourism, and hospitality operations. (Source)

Chinese Condiment Giant Foshan Haitian Eyes Hong Kong Dual Listing

China's largest listed condiment maker Foshan Haitian is planning a dual listing in Hong Kong, aiming to raise HK$1.5 billion (US$193 million) to support its global brand expansion. The company, currently valued at US$37 billion, specializes in producing soy sauce, oyster sauce, vinegar, and cooking condiments. The listing initiative aligns with China's push for domestic firms to pursue dual listings, following similar moves by Mao Geping and Sichuan Baicha Baidao. Haitian's shares have demonstrated strong market performance with a 1.2% gain in Shanghai and a 27% annual increase. The company is currently awaiting approval from both the China Securities Regulatory Commission and Hong Kong regulators for the listing. (Source)

Kioxia's Memory Chip IPO Prices at Lower Range Despite Strong Market

Japanese memory-chip maker Kioxia has completed its IPO, raising $800 million at a valuation of $5.1 billion, significantly below its 2018 valuation of $18 billion when Bain Capital acquired it from Toshiba. The company's market position has faced challenges, with its NAND flash memory market share declining from 17.8% in early 2023 to 15.1% in late 2024. The IPO represents Japan's third-largest this year but stands out as only the second of 72 Japanese IPOs to price at or above the upper range, contrary to the trend where 97% of Japanese IPOs priced at or above the upper end. The company carries $4.9 billion in net debt, equivalent to 1.2 times shareholders' equity, which could limit capital investment compared to competitors Western Digital, SK Hynix, and Samsung. Only 25% of IPO proceeds will go to Kioxia, while Bain and Toshiba sell most shares, with Toshiba maintaining 40% ownership. (Source 1) (Source 2)

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