Amundi Jumps in Debut After Pricing Stock Near Bottom of Rangeby
Shares increase as much as 5.9% in first day of trading
Credit Agricole may sell up to 5m shares in overallotment
Amundi’s shares rose almost 6 percent on their first day of trading after the company priced them at the lower end of the marketed range in an initial public offering.
Amundi’s stock opened at 45 euros a share in Paris trading Thursday, with most of the proceeds going to Societe Generale SA. The Paris-based bank raised 1.5 billion euros ($1.6 billion) by selling its entire stake in the French investment manager. The shares were up 2.2 percent at 45.98 euros at 3:46 p.m. while all major European equity indexes declined.
Amundi has “very strong potential of development for the future in two main regions, which are Europe and Asia,” Chief Executive Officer Yves Perrier, 61, said in a Bloomberg Television interview. Amundi’s main focus is to expand by attracting money inflows but it has “free available capital” of 1.3 billion euros that may be used for acquisitions, he said, without identifying any takeover targets.
Amundi expects net income of 515 million euros to 535 million euros this year, which would value it at about 14.5 times annual profit. BlackRock Inc., the world’s largest asset manager with $4.5 trillion in assets at the end of September, has a market value of about 18 times the $3.3 billion profit estimated for this year by 17 analysts surveyed by Bloomberg.
Amundi’s pricing gives it a market value of about 7.8 billion euros, more than any other asset manager in continental Europe. In the U.K., Schroders Plc has a market value of about 8.1 billion pounds ($12.3 billion).
“Not many rivals in Europe are listed. It’s not easy to get the idea of an objective valuation,” said Jerome Forneris, who helps manage $9 billion at Banque Martin Maurel in Marseille and didn’t buy Amundi shares in the IPO. “The floating is limited, and this doesn’t help.”
The initial trading price compares with a marketed range of 42 euros to 52.50 euros, which was narrowed toward the lower end this week. Societe Generale, France’s second-largest bank, is selling its 20 percent holding to bolster capital levels as global lenders face harsher rules.
Amundi, created when Societe Generale’s asset-management business was put under the same roof of Credit Agricole’s in 2010, is now one of Europe’s largest traded fund managers. The company targets 120 billion euros of net inflows over the next three years, with more than a third coming from clients such as sovereign funds, pension funds or corporations. The company had 952 billion euros of assets at the end of September.
Credit Agricole SA, Amundi’s majority owner, may sell as many as 5 million shares using an over-allotment option available until Dec. 11. A unit of Agricultural Bank of China Ltd. is also buying about 2 percent of Amundi shares from Credit Agricole.
The sale will add about 24 basis points to Societe Generale’s common equity Tier 1 ratio, a key measure of capital strength, the bank said in a separate statement.