Numericable, France’s largest cable operator, saw its stock rise after it market debut raised about €652.2 million in the country’s biggest initial public offering in four years.
The shares climbed as much as 10 per cent to €27.40 and traded at €27.10 in Paris. They were priced at €24.80, at the top of the offer range, after demand outstripped supply by 10 times. The amount raised could increase to as much as €750 million including a so-called over-allotment option.
Numericable plans to invest in high-speed fixed networks to tap into rising demand for speedier Internet connections. Numericable is also betting consumers will pay more for their monthly fixed subscriptions if their set-top boxes include extra services such as YouTube and Twitter.
The company had approached Vivendi about a potential merger with its SFR unit in January. Concerns over valuation and deal structure stood in the way of a potential tie-up, according to reports.
Asked about prospects for consolidation with SFR, Chief Executive Officer Eric Denoyer said in an interview that “there won’t be many fixed networks in France in the end – probably only two. We’re building a network and the IPO gives us the means to do that,” Denoyer said.
Numericable’s network connects to about 10 million homes in France, half of which use the faster fibre technology. The company forecasts revenue growth of 2 per cent to 5 per cent a year from 2013 to 2016, with an adjusted margin on earnings before interest, taxes, depreciation and amortisation of 50 per cent in 2016.