SoftBank-Backed Auto1 Soars in Debut After $2.2 Billion IPO

Written by
Swetha Gopinath
Written by

Swetha Gopinath

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(Bloomberg) -- Online used-car dealer Auto1 Group SE surged as much as 49% in its Frankfurt trading debut after its initial public offering raised 1.8 billion euros ($2.2 billion), the first in what is shaping up to be a busy year for German listings.

The stock's jump at the open is the biggest in Europe among $1 billion-plus listings since Polish retailer Allegro.eu SA started trading 51% above its IPO price in October, according to data compiled by Bloomberg.

Shares in Auto1, which is backed by SoftBank Group Corp., climbed 39% to 52.75 euros at 9:47 a.m., compared with the IPO price of 38 euros. This is the largest offering in Germany since TeamViewer AG's in September 2019.

“This is yet another business reshaping an industry; car dealers as we know them will disappear, said Guillermo Hernandez Sampere, head of trading at asset manager MPPM EK in Germany.

The list of companies lining up to go public in Germany this year is growing ever longer. Daimler AG, the maker of Mercedes-Benz luxury cars, said Wednesday it is evaluating a spinoff and listing of its truck unit. The same day, Vodafone Group Plc said the plan to float its European mobile phone masts business, Vantage Towers, in Frankfurt early this year “remains firmly on track.”

German buyout firm MBB SE is said to be evaluating investor demand for an IPO of pipeline construction business Friedrich Vorwerk SE in the first half of the year. And Bloomberg News reported that EQT AB is planning to list or sell at least two German assets: cybersecurity company Utimaco GmbH and enterprise software developer SUSE.

Frankfurt could use the boost: Only seven companies went public on the exchange in 2020, raising $1.3 billion combined, data compiled by Bloomberg show. European IPOs in general are off to a good start this year as 23 companies, including Auto1, have priced nearly $11 billion worth of deals.

Like Auto1, postal locker firm InPost SA, iconic bootmaker Dr. Martens Plc and online greeting-card retailer Moonpig Group Plc all priced their IPOs at the top of initial ranges. These stocks jumped more than 15% in their first day of trading.

Auto1, which operates Europe's largest wholesale platform for used cars, raised 1 billion euros, while a group of shareholders offered the remainder. SoftBank did not sell down any of the 20% stake it held prior to the IPO.

The German company's eponymous merchant brand sells cars via online auctions to more than 60,000 professional dealers, while its retail brand Autohero is for consumers looking to purchase used vehicles on the internet. The bulk of the company's IPO proceeds have been earmarked for investment in its retail arm.

Citigroup Inc., BNP Paribas SA, Goldman Sachs Group Inc. and Deutsche Bank AG were joint global coordinators. Barclays Plc, HSBC Holdings Plc, Numis Corp Plc and Royal Bank of Canada are bookrunners. Commerzbank AG, Credit Agricole CIB, Mizuho Financial Group Inc. and Wells Fargo & Co. were co-lead managers.