French cable provider Numericable SAS is seeking to raise about 652.5 million euros ($900 million) in the country’s biggest initial public offering in four years and the latest indication of demand for Europe’s landline assets.
The shares are being offered at 20.30 euros to 24.80 euros apiece, Numericable said today. The range values the company at 5.06 billion euros to 5.57 billion euros including debt, Chief Executive Officer Eric Denoyer said at a press conference. Pricing will be decided Nov. 7, with trading scheduled to begin the following day in Paris.
Numericable joins online advertiser Criteo SA (CRTO:US) and floor maker Tarkett SA attempting to list in their home market and in the U.S. this quarter. The IPO, if completed, would be the largest listing in Paris since December 2009, when automotive distributor CFAO SA raised more than 800 million euros. Carlyle Group LP and Cinven Group Ltd. are selling Numericable stock valued at about 402.2 million euros, accounting for the majority of the shares offered.
“The story we’re telling you today is about growth, about investing to accelerate,” Denoyer said. “We think our network will be enough for us to reach our growth forecasts. We don’t need a tie-up, and we don’t need anything else.”
The cable operator’s enterprise value would be in a range of 5 billion euros to 6 billion euros, Bloomberg News reported last week. Numericable has about 2.75 billion euros in net debt.
Including debt, the stock would be valued at as much as 6.4 times the company’s 2012 sales. That compares with an average of 4.5 times for peers Kabel Deutschland Holding AG (KD8), Liberty Global Plc (LBTYA:US), Telenet Group Holding NV (TNET) and Ziggo NV (ZIGGO), data compiled by Bloomberg show.
Volumes of IPOs on European exchanges have nearly doubled to about $19 billion this year as investors resumed buying on strengthening economies and an easing euro debt crisis, according to data compiled by Bloomberg.
Europe’s cable assets are in demand. Billionaire John Malone, the biggest U.S. investor in the region’s cable operators, acquired Virgin Media Inc. this year and has increased his stake in Dutch provider Ziggo. Vodafone Group Plc (VOD) snapped up Kabel Deutschland in Germany. In Spain, Grupo Corporativo ONO SA is also considering an IPO.
European cable companies are trading at a median price-to-earnings ratio of 19 times, according to data compiled by Bloomberg. That compares with a median of 14 times the region’s phone companies are valued at.
Numericable, which competes with Orange SA (ORA) in selling TV, phone and high-speed Internet packages, plans to appeal to investors by tapping into rising demand for speedier Internet connections, Denoyer said in an interview this month.
“I’m not going to compare us to any of our cable rivals in Europe -- a lot of them have gone through deals, and that’s not necessarily the story we are writing,” he said today.
The company, based in Champs-sur-Marne on the outskirts of Paris, forecasts revenue growth of 2 percent to 5 percent a year from 2013 to 2016, with an adjusted margin on earnings before interest, taxes, depreciation and amortization of 50 percent in 2016. Last year, sales shrank 0.3 percent to 1.3 billion euros and the Ebitda margin was 47.6 percent.
Private-equity firm Altice will become Numericable’s biggest shareholder with a 30 percent stake after the IPO. Under a so-called over-allotment option, Carlyle and Cinven may increase the Numericable shares they sell by 15 percent. Should those shares be fully subscribed, Carlyle’s holding will fall to 24.5 percent, and Cinven’s to 15.2 percent.
JPMorgan Chase & Co. (JPM:US) and Deutsche Bank AG (DBK) are managing the share sale.
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