Issuers of European equity and their advisors have paused for breath to take stock of a violent correction in US benchmark indices and continuing trade hostilities between the US and some of its closest economic partners.

Last week’s ECM Pulse reported on Europe’s full pipeline of IPOs slated before summer. The column noted that volatility was increasing.

Oh, what a difference a week makes! The S&P 500 and Nasdaq Composite both entered technical corrections last week, falling 10% from their most recent highs.

In this sort of febrile environment, IPOs can be nearly impossible to navigate, given low liquidity of new listings and long marketing periods exposing transactions to weeks of possible volatility.

As a result, one of this window’s early expected deal candidates, Blackstone-backed Spanish gaming company Cirsa, is no longer imminent.

Source:Dealogic

An ECM banker in Spain said that there had been market talk of a deal launch last week, but it had failed to materialise.

The Spanish press reported at the end of last week that Blackstone had “postponed” a listing until after Easter, but sources then told this news service that the sponsor was not committing to any window and would not push a deal into a bad market.

Cirsa’s leverage means that any IPO will be a largely primary listing with proceeds used to pay down debt on the balance sheet. This means the sponsors will likely sell very little in the listing, hoping to monetise later once the stock trades up.

A bad deal, with the stock trading down, delays this exit process and the ability to return capital to Blackstone’s limited partners (LPs). Waiting for a better market rather than risking a valuation collapse post-IPO makes sense in this context.

Several bankers and two ECM investors told ECM Pulse this week that market turmoil meant that there was less chance of any European IPOs being launched, or priced, this side of Easter if volatility continues.

“These market conditions are not good for IPOs,” a banker said. “You can do a block trade on a good day because those are liquid stocks so investors are happy with the risk.”

The fear around IPOs is due to severe single-stock volatility on European exchanges, despite benchmarks holding up ok. While the Stoxx 600 is still up YTD, much of that has been from heavy gains in defence-linked stocks like Germany’s Rheinmetall [ETR:RHM] or UK-listed BAE Systems [LON:BAE] or France’s Thales Group [EPA:HO].

Other share prices, particularly in sectors linked to exports have suffered heavily over the last month.

A huge range of European giants across industries such as Puma [ETR:PUM], Ocado [LON:OCDO], Flutter Entertainment [LON:FLTR/NYSE:FLUT], EQT [STO:EQT], Stellantis [EPA/BIT:STLAP] and LVMH [EPA:MC] have seen a greater than 10% decline in their share prices over the last month.

A recently listed stock is even more exposed to this volatility. For example, this year’s largest US IPO, the USD 1.75bn listing of Venture Global [NYSE:VG], is down around 57% from its IPO price, a rocky start to trading dramatically accentuated by tariffs given the company’s significant Chinese operations.

IPOs in a holding pattern

Cirsa is not the only new European listing likely to be pushed back until at least after the Easter break, given the traditional four-week marketing process normally required for a listing.

“I think it is very hard to launch an IPO in this market, you need two, to three, weeks of stability and that is difficult to see at the moment,” said an investor. “That means doing a deal pre-Easter it is getting quite tight.”

Even post-Easter, issuers might decide to wait and see, the investor added.

“If you don’t have to go now, why would you?” the investor also said. “But if you wait too long the financial results start going a bit stale, so you then might have to wait even longer and go with your 1Q results. It all becomes a bit painful, but it might be a blessing in disguise this is all happening now rather than in the middle of a busy window.”

Alongside Cirsa, ECM Pulse previously predicted a busy pipeline of IPOs to come, including German pharmaceutical company Stada, from Bain Capital and Cinven.

Both investors noted that the high-profile listing of Stada, like Cirsa, will likely need significant primary capital at IPO so may also have to be pushed until the sponsors are likely to get a more forgiving aftermarket.

The German listings for Oldenburgische Landesbank (OLB) and Autodoc are also possible before the summer, as is an Amsterdam listing of Dutch telco Odido.

Ottobock and Brainlab are two other German names in the pipe reported to be targeting a listing in the next few months, alongside the German division of Dutch State-owned utility company TenneT and the re-IPO of German utility firm Uniper [ETR:UN0],

One of the investors noted that one of the few IPOs that might be able to be priced imminently is OLB, owned by Apollo (32.73%), Grovepoint Investment Management (29.58%), Teacher Retirement System of Texas (TRST) (29.33%) and others (8.36%).

The investor added that the company does not have the same leverage issues as some of the other IPO candidates in the pipe and is expected to be a mostly secondary share sale, so sellers could be more flexible on size.

However, OLB has been an IPO candidate before and there are questions over whether the sellers would push a deal into what is generally regarded to be a negative market.

A source close to the deal noted that OLB sellers are aiming for the spring IPO window, but much depends on market conditions, as previously reported by this news service. “They’re already tried so will be cautious about having to pull it again,” he said for this report.

Several bankers speaking to ECM Pulse this week noted that their IPO pipelines are now looking less busy than they previously expected in the weeks ahead. “It’s just a brutal market out there,” said one.