Amundi Defies Market With IPO as SocGen to Exit Asset Manager

  • Analysts managing IPO in Paris put Amundi value at $9 billion
  • Share sale to be one of biggest in European finance this year

Amundi Group, Europe’s largest asset manager, is seeking to defy recent market swings and proceeding with a sale of shares to the public as Societe Generale SA divests its stake to raise cash.

Analysts at banks managing the initial public offering in Paris say it will value Amundi at about 8 billion euros ($9 billion), according to three people with knowledge of the matter. That would make it one of the biggest IPOs of a financial company in Europe this year.

Global equity markets slumped in the third quarter, marking their worst performance since 2011, amid concern that China’s slowdown may reduce economic growth elsewhere. With investors seeking ways to offset the impact of record-low interest rates in Europe, Amundi is luring shareholders with a pledge to raise earnings and dividends.

“Animals like this are rare in continental Europe, so this could make it easier for Amundi to sell itself as a European BlackRock even if it’s smaller, less diversified and less global,” said Karim Bertoni, who helps manage more than $6 billion at Bellevue Asset Management near Zurich. “This is a window of opportunity for the IPO, it’s a good shot for Credit Agricole and SocGen.”

Biggest IPO

Societe Generale has said it wants to sell its entire 20 percent stake in the company to help raise its capital levels. Credit Agricole SA, which holds the rest, may sell as much as 5 percent but hasn’t taken a decision yet, Amundi Chief Executive Officer Yves Perrier told journalists in Paris on Wednesday.

The IPO’s “starting point is Societe Generale’s desire to cash in on its stake, which is completely natural and fitting with the shareholder’s pact,” Perrier said.

The sale of a 25 percent stake valued about 2 billion euros would be the biggest European financial industry IPO since Pershing Square Holdings Ltd., one of the funds managed by activist investor Bill Ackman, raised $2.7 billion last year. It would only lose the top spot this year if the Dutch government goes ahead with a sale of shares in ABN Amro Group NV, a lender it says is worth about 15 billion euros.

Perrier didn’t confirm the valuation, saying it will depend on investor appetite.

The company has forecast net income of 515 million euros to 535 million euros this year, an increase of as much as 9 percent from last year. That would value it at about 15 times annual profit. BlackRock Inc., the world’s largest asset manager, has a market capitalization about 16 times the $3.3 billion profit that 10 analysts forecast the firm to generate this year, according to the average estimate in a Bloomberg survey.

‘Natural Alternative’

Amundi aims to become a "natural alternative to big U.S. fund managers," Perrier said. The company wants to return at least 60 percent of its profit to shareholders through dividends and expects annual earnings per share to grow at least 5 percent in the three years through 2018, he said.

The company’s 954 billion euros of assets under management at the end of June may swell to “not far” from 1 trillion euros by the end of the year, said Perrier. Schroders Plc, currently Europe’s largest publicly traded money-manager, had about 310 billion pounds ($472 billion) under management at the end of June, while BlackRock had about $4.2 trillion.

The company plans to complete the IPO by November, said the people familiar with the valuation, who asked not to be identified because the preparations are private.

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