Telepizza Shares Fall 19% on Debut After $685 Million IPO

  • Shares, priced at 7.75 euros Tuesday, fell to 6.25 euros
  • Investors including Permira, KKR raised 431 million euros

Spanish pizza delivery company Telepizza Group SAU plummeted 19 percent in its first day of trading after a nearly decade-long hiatus from the market when it was reorganized by private-equity companies.

Telepizza raised 605 million euros ($685 million) in Spain’s largest initial public offering this year, according to deal terms that were distributed Tuesday. The shares were priced at 7.75 euros per share, the low end of the company’s offer range of 7 euros to 9.50 euros. The IPO amount includes an over-allotment option of 55 million euros.

The shares dropped 19 percent to close at 6.25 euros in Madrid on Wednesday. Newly listed companies in Europe this year have risen an average of 6 percent on their first day of trading, according to data compiled by Bloomberg. Comparable listed companies in Europe include Domino’s Pizza Group Plc, whose London traded shares have gained about 13 percent in the last year.

The company, which describes itself as the largest pizza delivery business outside of the U.S., has had a slight decline in revenue in the last few years. Revenue was little changed last year at 328.9 million euros and down from 336.8 million euros in 2013, according to Telepizza’s prospectus. Founded in 1987, the company operates a network of more than 1,300 stores in 15 countries.

Investors including Permira Advisers’s Foodco Finance and funds managed by KKR & Co. raised 431 million euros by selling Telepizza shares. The company also sold new shares.

Bank of America Corp. and UBS Group AG advised on the IPO along with Barclays Plc, Banco Bilbao Vizcaya Argentaria SA and Nomura Holdings Inc.

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