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Germany’s TLG clings to IPO plan but Scout24 delays, say sources-Reuters

(Reuters) – German property company TLG Immobilien will stick to plans to list on the Frankfurt stock exchange within weeks despite a slump in European markets, but online classifieds group Scout24 is unlikely to float before 2015, people familiar with the deals said.

While recently listed tech companies similar to Scout24 have proven volatile, steady earners like real estate group TLG are still finding investor interest, the sources said.

Companies planning to go public have become cautious after market volatility spiked in recent weeks, causing several European groups to pull planned listings.
Germany’s bluechip DAX index has shed 9 percent over the last month.

The decline is mainly due to fears of higher interest rates in the United States and a worsening economic outlook in Germany, triggering a sell-off that has hit newly listed stocks such as Germany’s Rocket Internet and online fashion group Zalando.

It has also curbed investor demand for more offers.

“Markets are still stable enough for new listings. But investors selling out will have to allow for discounts,” an equities capital markets banker said.

TLG is owned by U.S. private equity firm Lone Star, which is seeking an exit. For the buyout group, an IPO even at a lower price may still pay out.

While Lone Star would not maximize proceeds by selling part of its holdings now, it would retain the possibility to sell further blocks of shares at possibly higher prices at a later stage.

“The TLG prospectus may be published shortly,” one of the sources said. An IPO usually takes place about two weeks after the prospectus is released.
Another source said that investor feedback has been positive so far. “TLG is a company with substance and prospects for stable dividends.”

By contrast, Scout24’s private equity majority owners Hellman & Friedman and Blackstone have put the planned flotation on hold.

“The Scout24 owners just only got in, they have no reason to sell fast. They would rather wait than sell at a discount,” one of the sources familiar with the deal said. The deal may be revived as soon as early 2015, the person said.

The buyout groups acquired a majority stake from Deutsche Telekom earlier this year and had hoped to take advantage of buoyant markets.

Scout24 itself said that it is continuing to monitor the possibility of an IPO. “But we are not under time pressure,” a company spokeswoman said.

German cable operator Tele Columbus said on Monday it was still monitoring equity markets to gauge investors’ appetite for a planned initial public (IPO) offering but pointed to rising uncertainty.