Talk in London prompts speculation about big Czech IPO

By bne IntelliNews August 28, 2013

bne -

On the emerging market desks of banks in London on August 27 there was widespread talk doing the rounds of a large IPO expected soon from a Czech company.

There was little clue as to the name of the firm, though sources say the banks hired to organise the share offering had been re-mandated to do the deal, suggesting the IPO had once been in the works before being postponed due to probably to the difficult market conditions of the past year.

If that is the case, then three candidates stand out. Czech anti-virus software provider Avast Software pulled its international IPO in July last year just days before it was due to be priced. A spokeswoman put the reason down to the "overall bad market conditions" of the time. Avast had been expected to issue 9m shares, which if priced at the mid-point of the $9-11 per share range, would have raised $90m and valued the Dutch-based company - though like AVG it has its roots in the Czech Republic - at €846m.

Avast had been a Nasdaq IPO, though. In London, PPF Group, the investment vehicle of Czech tycoon Petr Kellner, in 2011 had been in the preliminary stages of planning an IPO of its subsidiary holding Home Credit B.V. (Netherlands), the holding company for the group's consumer finance business in the Czech Republic, Slovakia, the Russian Federation, Kazakhstan and Belarus. The flotation would help finance Home Credit's expansion into Asia and north Africa, such as India, Indonesia, China and Egypt, which is continuing apace.

According to bne's information at the time, PPF hired Deutsche Bank, Citigroup, Merrill Lynch and JP Morgan to lead manage the IPO in London.

Another perennial favourite for an IPO is for the Belgian group KBC to float shares in its subsidiary CSOB, the Czech Republic's largest lender.

A KBC spokesman was reported in February 2011 as saying "an IPO ... was on schedule and that we are waiting for the right window and the opportunity." KBC had agreed with the European Commission to float a minority stake in CSOB as part of concessions for receiving state aid at the height of the financial crisis. However, by July of that year the bank said it had been cleared by European authorities to drop its planned IPO in the Czech bank and go ahead instead with a sale of its Polish assets.

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