Spain's Puig prices shares at top of range in oversubscribed IPO

MADRID/LONDON (Reuters) -Spanish beauty group Puig said on Tuesday it had set the final price for its initial public offering (IPO) at 24.50 euros a share, the top of its announced range, implying a market capitalisation of 13.9 billion euros ($14.8 billion).

Spain's largest IPO in almost a decade was multiple times oversubscribed across the price range amid strong demand from international and domestic institutional investors, the company said in a document published by the stock market regulator.

The owner of Rabanne and Carolina Herrera perfumes, which are among the world's top-15 fragrance brands, will start trading on the Spanish stock market on Friday, following a string of European stock listings this year helped by improving market sentiment.

The company and the controlling Puig family stand to raise up to 3 billion euros through the sale of class B shares, which confer fewer votes than class A shares but the same economic rights. As a result, the Puig family will retain a majority of the voting rights in the company.

"Puig has got it right. Companies should be floated when the stock market is at its highs, as now," said Manuel Romera, a professor of finance at IE University.

But tapping the market at a high price could affect investor sentiment if shares do not rise after the launch, he added.

Better market conditions and higher stock prices have prompted a revival in European IPO volumes this year.

The performance of new listings has been mixed, however, with Swiss skincare group Galderma and private equity firm CVC Capital Partners soaring on their market debuts, while German perfume retailer Douglas has traded below its issue price.

Marc Puig, the group's chairman and chief executive, said the IPO price reflected "very strong investor demand" and hailed it as "testament to the hard work and unwavering dedication of all the Puig teams".

Barcelona-based Puig, which has made a string of acquisitions in the last decade, saw net revenues grow 10.1% in the first quarter of 2024 from the year before, exceeding the overall growth of the wider premium beauty market.

One of its main competitors, L'Oreal, reported a 9.4% rise in first-quarter sales.

Among those drawn to Puig's IPO was CriteriaCaixa, an investment arm for Spanish lender CaixaBank's largest shareholder. The investor said it had committed to invest 425 million euros in the deal, giving it 3% of Puig's share capital.

($1 = 0.9366 euros)

(Reporting by Corina Pons and Pablo Mayo Cerqueiro; Edititng by Andrei Khalip and Mark Potter)