July 21, 2024

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Caution kills the Golden Goose IPO

2 min read

Even association with Taylor Swift couldn’t save Golden Goose’s IPO.

The Italian company, known for its high-end, distressed sneakers, today shocked the market by announcing the withdrawal of its nearly €600mn flotation in Milan.

This offering seemingly had everything going for it: star power, fashion appeal, exceptional financial performance, and a €100m cornerstone order from Invesco. The IPO was touted as one of the highlights of 2024.

It got off to a brisk start. The offering was covered throughout the range within the first hour of bookbuilding. Syndicate bankers talked up the “number of quality, long-only international investors” prepared to anchor the transaction. And all this was happening against a backdrop of excellent European IPO performance, with shares in microcomputer maker Raspberry Pi rising nearly 50 per cent since its London debut last week.

Despite these promising signs, the IPO faced a stark reality: the order book lacked demand from fundamental, “long-only” institutions. And Golden Goose’s controlling shareholder Permira couldn’t afford another capital markets turkey after the London flotation of Doc Martens.

The first sign that something was amiss came when the price range was announced last week. Briefed by deal participants, the financial media had talked about a €3 billion enterprise value, implying an equity value north of €2.5bn after deducting net debt, and in any case a substantial premium to Italian jacket maker Moncler.

Yet the market cap implied by the price range was €1.69-1.86bn, which came in “below expectations” and amounted to a 25-30 per cent discount to Moncler’s multiples. Then yesterday morning, the syndicate banks told investors that the IPO would price near the bottom of the range at €9.75 per share.

The seven (!) IPO bookrunners sought to reassure the market, insisting that the offering had been multiple times oversubscribed at and above that level. There is absolutely no reason to doubt the…

2024-06-18 18:52:04

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