Companies across Europe had hoped to sell and list shares in the wake of Chinese e-commerce group Alibaba’s blockbuster $25 billion (€19.7 billion) listing on the New York Stock Exchange last month. But reduced growth expectations have caused stocks to slide globally, with investors losing their appetite for new, risky investments.
While several firms in Germany and France have postponed listings and the German listings of Rocket Internet and Zalando disappointed, Probiodrug still plans to raise up to €32 million ($40.6 million) by selling up to 1.7 million shares between €15.25 and €19 a piece.
The firm, which is developing drugs to treat Alzheimer’s, announced its detailed listing plans on Friday, when the Dow Jones stock index ended the trading week with a 2.7 procent loss and the German blue chip index DAX with a slide of 4.4 percent.
One reason why Probiodrug, which plans to list its shares on the Amsterdam Exchange on Oct. 27, intends to move ahead with its listing, could be a commitment of existing shareholders to buy about €15 million worth of the offered shares.
The existing shareholders are mostly specialized biotech investors, including HBM Healthcare, Edmond de Rothschild Investment Partners, BB Biotech and Life Science Partners.
The Probiodrug listing could also benefit from its relatively small size, compared to other planned listings, which were in the triple-digit millions.
A slump of stock prices globally and the poor performance of Zalando and Rocket Internet shares have led some firms to postpone their planned listings.
Probiodrug’s plans to sell shares follow the disappointing listings of German Internet firms Rocket Internet and Zalando.
Internet incubator Rocket listed two weeks ago raising around €1.4 billion but its shares have fallen 17 percent from the issue price of €42.50.
German online shoe and clothing retailer Zalando raised €605 million almost two weeks ago but its shares have fallen nearly 17 percent from an issue price of €21.50
Combined with a slump of stock prices globally, the poor performance of Zalando and Rocket Internet shares have led some firms to postpone their planned listings.
German property firm TLG Immobilien, which had hoped to raise around €500 million, online market place Scout24 and cable operator Tele Columbus have postponed their listing plans, sources familiar with the plans told the Reuters news agency.
French energy services group Spie, which had planned to raise up to €1.2 billion, postponed its listing plans on Thursday, citing “volatile market conditions.”
Despite losses of €3.8 million in the first six months of this year and €9.9 million in the whole of 2013, Probiodrug is ignoring market turbulence in the hope of raising capital to continue its development of Alzheimer’s drugs.
Gilbert Kreijger is an editor for Handeslblatt Global Edition and has covered companies and markets across Europe. Lára Hilmarsdóttir has reported for several publications. To contact the author: Kreijger@handelsblatt.com, L.Hilmarsdóttir@vhb.de