Allegro Raises About $2.3 Billion in Largest-Ever Warsaw IPO

Allegro IPO Raises $2.3 Billion in Largest-Ever Warsaw Listing

E-commerce platform Allegro raised about 9.2 billion zloty ($2.3 billion) in Warsaw’s largest-ever listing after selling more shares than planned thanks to strong demand for technology-related stocks in Europe.

Allegro sold 213.5 million shares at 43 zloty each, the top end of a marketed range, the company said in a statement Tuesday. On Friday, the group increased the total deal size by 14%.

The company raised 1 billion zloty by selling 23.3 million new shares, while the remainder came from Allegro’s private equity owners Cinven, Permira and Mid Europa Partners. The stock is set to start trading on Oct. 12.

If the underwriters exercise in full their option to sell more shares from the buyout firms, the size of the offering will increase to $2.7 billion, with 24% of the share capital available for trading. Allegro’s IPO is the biggest on record for the Warsaw bourse, surpassing insurer PZU SA’s 8.1 billion-zloty offering in 2010.

The IPO values Allegro at $11.2 billion, meaning it is set to overtake computer-game maker CD Projekt SA as Warsaw’s biggest company. Allegro’s private-equity backers bought the business from South Africa’s Naspers Ltd. in 2016 for $3.25 billion.

Trigon estimates that at the maximum deal size, Allegro’s IPO would allow it to secure a 6.3% weighting in the WIG20 Index. Meanwhile, the broker expects inclusion of the stock in the MSCI and FTSE-Russell benchmarks could trigger 1.15 billion zloty of demand for shares from passive funds that track both gauges.

Allegro Raises About $2.3 Billion in Largest-Ever Warsaw IPO

Allegro’s listing is also expected to boost the profile of a growing contingent of Polish tech stocks, along with several stock offerings from the gaming sector.

The company is betting on the continued expansion of online shopping in Poland, a market of 38 million people and one of the European Union’s most resilient economies. Allegro is counting on lower fees, a loyalty program, a high number of local merchants and market recognition to fend off competition from the likes of Inc. or China-based AliExpress, should they expand in Poland.

The listing demonstrates the widening gulf between tech stocks and old-economy firms in Europe’s IPO market. Belgian fintech company Unifiedpost Group SA also priced its offering at the top end of an initial range and sold more shares than initially expected.

In contrast, China Yangtze Power Co. started trading in London on Friday after selling fewer shares than hoped at the bottom end of its price range, much alike camper-van maker Knaus Tabbert AG ahead of its debut in Frankfurt last week.

Goldman Sachs Group Inc. and Morgan Stanley are global coordinators on Allegro’s listing, while Barclays Bank Plc, Bank of America Corp., Citigroup Inc. and Dom Maklerski Banku Handlowego SA are bookrunners.

Santander Bank Polska SA and BM PKO BP are bookrunners and co-offering agents in Poland in connection with the offering to individual investors. Bank Polska Kasa Opieki SA, Credit Agricole SA, Erste Group Bank AG, Pekao Investment Banking SA and Raiffeisen Centrobank AG are co-lead managers. Lazard Ltd. is the financial adviser.

Retail investors were allocated 9.3 million shares in the IPO, the company said.

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