• Galderma shares with first day of trading on SIX
• Initial price above issue price
• Galderma valued at 14.5 billion francs at IPO
After the former Nestlé subsidiary first announced its intention to go public at the end of 2021, the time had finally come this Friday: Galderma shares started their first day of trading on the Swiss SIX stock exchange.
The initial price of the share certificate was 61 Swiss francs. The skin care company initially offered the shares to potential investors in a range between 49 and 53 francs and ultimately set the issue price at 53 francs. Since the initial price of the Galderma share on the SIX was above this value, the investors who subscribed to the share as part of the IPO initially recorded profits.
This means that the company was valued at around 14.5 billion francs at the start of the stock market. As the day progressed, the shares rose even further and closed the trading day at 64 francs.
Galderma with the largest Swiss IPO in years
It is the largest IPO in Switzerland since 2017, when the measurement technology group Landis & Gyr went public, and one of the largest in Europe in more than two years, as the stock exchange operator SIX announced on Friday. This could lay the foundation for further successful IPOs this year.
Interest rate cuts as an opportunity for the stock market
Since the beginning of 2022, difficult market conditions and geopolitical tensions have led to a decline in global IPO activity, writes SIX. But after a long period of uncertainty, the macroeconomic situation is beginning to normalize. This is confirmed by the recent decline in interest rates and inflation.
In fact, Galderma didn’t choose a bad date for its IPO, the day after the SNB cut interest rates. Because when interest rates fall, share prices rise – which was confirmed on Thursday after the SNB decision.
On (today’s) Friday the stock market is standing still, but observers assume that the reduction in the key interest rate will weaken the franc and thus strengthen the growth of the export-oriented industry – which in turn speaks for rising stock prices.
Different starts
According to SIX, a recovery can also be observed on the global stock markets. “We are confident that this increasingly positive market environment will help usher in a number of new and exciting IPOs in Switzerland and beyond,” said Bjørn Sibbern, Global Head Exchanges at SIX.
But the results of the major global IPOs of the last few days were different: while the online platform Reddit raised around $750 million when it went public on the US stock exchange on Thursday and achieved a premium of almost 50 percent on the issue price The IPO of the Douglas perfume chain in Germany was a flop. At the close of trading, the shares cost around 11 percent less than the issue price.
It is currently unclear when the next IPO will take place in Switzerland. Another “classic” IPO like Galderma’s is currently not in sight.
There are still a few IPOs on the agenda
Holcim does have stock market plans for its US business. The securities of the North American activities are also to be listed in the USA. And the Chinese-owned Swiss agricultural chemical company Syngenta is to be spun off and listed on the Shanghai stock exchange.
The TX Group has also announced another IPO through a spin-off, which will take place in this country. It wants to take its advertising marketing subsidiary SMG Group public. However, this IPO is likely to be significantly smaller than Galderma’s.
Botox and skin care
The former Nestlé division Galderma announced its IPO on the SIX just over three weeks ago. A total of around 37.2 million new shares and around 0.28 million existing shares were placed. There is also a possible over-allotment option of around 5.6 million shares.
The company plans to use the proceeds from the sale of the newly issued registered shares primarily to strengthen its balance sheet by repaying and refinancing debts. Galderma will be included in the Swiss Performance Index (SPI) and its sub-indices on the second trading day, i.e. next Monday.
In addition to sun creams such as “Daylong”, the group also sells medications for skin diseases such as acne, psoriasis and rosacea. Products against skin cancer are also part of the company’s portfolio. In addition, Galderma offers various brands of Botox.
Editorial team finanzen.ch / Zurich (awp)