Numericable Rises in Market Debut After Raising $875 Million

Numericable SAS, France’s largest cable operator, rose in its trading debut after raising about

652.2 million euros ($875 million) in the country’s biggest initial public offering in four years.

The shares climbed 15 percent to 28.50 euros in Paris. They were priced at 24.80 euros, at the top of the offer range, after demand outstripped supply by 10 times, Numericable said. The amount raised could increase to as much as 750 million euros including a so-called over-allotment option.

The IPO is the largest listing in Paris since December 2009, when automotive distributor CFAO SA raised more than 800 million euros. Numericable, based in Champs-sur-Marne on the outskirts of French capital, is joining online advertiser Criteo SA and floor maker Tarkett SA in attempting to list in their home market and in the U.S. this quarter.

Volumes of IPOs on European exchanges have about doubled to $24 billion this year as investors resumed buying on strengthening economies and an easing euro debt crisis, according to data compiled by Bloomberg.

In the largest IPO by a U.S. technology company since Facebook Inc.’s debut in May 2012, Twitter Inc. yesterday jumped 73 percent in its trading debut in New York after raising $1.82 billion.

Network Building

Numericable, which competes with Orange SA in selling TV, phone and faster Internet packages, plans to invest in high-speed fixed networks to tap into rising demand for speedier Internet connections. Numericable is also betting consumers will pay more for their monthly fixed subscriptions if their set-top boxes include extra services such as YouTube and Twitter.

The company had approached Vivendi SA about a potential merger with its SFR unit, people familiar with the matter told Bloomberg News in January. Concerns over valuation and deal structure stood in the way of a potential tie-up, they said.

Asked about prospects for consolidation with SFR, Chief Executive Officer Eric Denoyer said today in an interview that “there won’t be many fixed networks in France in the end -- probably only two.” Numericable’s IPO valuation “reflects that potential, taking into account the future value of our network,” he said.

IPO Proceeds

“We’re building a network and the IPO gives us the means to do that,” Denoyer said. The company has now gained access to new means to pay back debt and invest in its networks, he said.

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 snapped up Kabel Deutschland in Germany. In Spain, Grupo Corporativo ONO SA is also considering an IPO.

Numericable’s network connects to about 10 million homes in France, half of which use the faster fiber technology. The company 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.

Another private equity backed company, Merlin Entertainments Group Ltd. in the U.K., gained in London trading today after raising $1.5 billion in its IPO. Blackstone Group LP, CVC Capital Partners Ltd. are among its owners. JPMorgan Chase & Co. and Deutsche Bank AG managed the share sale.

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