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Shares in German beauty retailer Douglas fell as much as 9 per cent in their Frankfurt debut on Thursday morning, as investors gave a lukewarm welcome to the country’s biggest initial public offering since 2022.
Germany’s biggest IPO since that of carmaker Porsche has been closely watched by investment bankers and investors who hoped it could mark the start of a rebound in Europe’s weak market for IPOs.
The stock’s fall came as the wider German stock market rose — the MDAX index of 50 mid-cap stocks was up 1.5 per cent on Thursday morning.
Private equity-owned Douglas had priced its 32.7mn new shares at €26, at the bottom of the price range. The first market price on Thursday was €25.50 and by mid-morning the shares were trading at €23.66.
Douglas raised €850mn in the IPO and received an equity injection of €300mn from existing shareholders, private equity group CVC and its founding family Kreke, resulting in a market capitalisation of about €2.8bn. The Düsseldorf-based company previously said that it would use the IPO’s proceeds to bring down its debt.
Including its remaining debt, the company will be worth close to €5bn. In the run-up to the IPO, Douglas had hoped to achieve a higher valuation, according to people familiar with the internal discussions.
CVC acquired Douglas eight years ago from private equity rival Advent and oversaw a choppy period. During the Covid-19 pandemic, the retailer faced significant financial stress and CVC injected additional equity to support a last-minute refinancing.
