French cable operator Numericable rises in market debut-Reuters

(Reuters) – Cable company Numericable’s shares rose as much as 8 percent in a stock market debut on Friday, valuing the group at about 3 billion euros ($4.01 billion) and raising 652.2 million to help the group repay debt and upgrade its broadband network.

The listing was the biggest in France since 2009 and a sign that strong equity markets this year have encouraged a revival of share sales in Europe after some lean years since the financial crisis.

Also on Friday, Madame Tussauds owner Merlin Entertainments (MERL.L: Quote, Profile, Research, Stock Buzz) and its selling shareholders raised 957 million pounds ($1.54 billion) from a listing in London, where its shares rose more than 12 percent.
The amount raised by European share sales in October was the highest since July 2011.

Numericable’s market debut also illustrated investors’ strong appetite for European cable companies as their all-inclusive bundles of television, Internet, mobile and fixed-line calls gain in popularity.

The company, which offers packages of pay-TV, Internet and fixed-line calls, priced its share sale on Thursday at the top of the range – at 24.80 euros – and said its order book was ten times oversubscribed.

The stock reached a high of 26.83 euros early on Friday and was trading at 26.51 euros by 1032 GMT.

Nevertheless the rise in the shares was modest compared with social network Twitter’s (TWTR.N: Quote, Profile, Research, Stock Buzz) 73 percent spike when it listed on the New York Stock Exchange on Thursday, or even the 30 percent pop enjoyed by French online advertising start-up Criteo (CRTO.O: Quote, Profile, Research, Stock Buzz) last week.

Numericable’s debut did coincide though with a downgrade of France’s credit rating by Standard and Poor’s, which helped drag the blue-chip CAC 40 index .FCHI down 0.7 percent by 1035 GMT.

Investors have tended to award cable companies premium valuations because some like Ziggo (ZIGGO.AS: Quote, Profile, Research, Stock Buzz) and Kabel Deutschland (KD8Gn.DE: Quote, Profile, Research, Stock Buzz) have been takeover targets for big telecom groups.

Numericable’s pitch to investors centered on its prospects of a 2 to 5 percent rise in sales a year to 2016 and pointed to its attractions as a takeover target for Vivendi’s (VIV.PA: Quote, Profile, Research, Stock Buzz) French mobile operator SFR and rival Bouygues (BOUY.PA: Quote, Profile, Research, Stock Buzz).

“Cable assets are in vogue in Europe right now, so Numericable has chosen a good time to go public,” said an analyst in London who declined to be named.

“The valuation was a bit full but shareholders can hope that Numericable gets bought or merges with a peer next year.”
Numericable’s private-equity owners Carlyle (CG.O: Quote, Profile, Research, Stock Buzz) and Cinven sold down part of their stakes, while fellow shareholder Altice raised its share. Their final holdings will depend on whether the over-allotment mechanism is used.

If the over-allotment option on the listing is fully exercised, then Numericable will raise 750 million euros.

Deutsche Bank (DBKGn.DE: Quote, Profile, Research, Stock Buzz) and JPMorgan (JPM.N: Quote, Profile, Research, Stock Buzz) are running the sale. Credit Agricole (CAGR.PA: Quote, Profile, Research, Stock Buzz), HSBC (HSBA.L: Quote, Profile, Research, Stock Buzz) and Morgan Stanley (MS.N: Quote, Profile, Research, Stock Buzz) are joint book-runners.