Summary
The successful launching of the VUELING’s IPO on the Spanish stock market –the second airline, after Iberia Airlines, publicly trading its shares- deserved a favorable attention from foreign and domestic institutional investors.
The low cost carrier (LCC) success has closely been scrutinized by other Spanish LCCs which, during the coming year, may follow the same path, provided the stock market goes on enjoying favorable winds.
Analysis
For its debutant session in the market on December first, VUELING’s IPO had targeted its share price somewhere within a band of 24-32 Euros. The final one paid by institutional foreign and domestic investors was set at 30 Euro per share, positioning the airline’s initial market value at 448.6 Million Euros. The total stock offered (6.37 million shares representing a 42.62% of the company’s capital, potentially increasing up to a 46.88% if the green-shoe is finally exercised) was over-subscribed 5.5 times. Quite a comfortable landing for the Spanish low-cost air carrier, after less than just two and a half years of commercial operations on its domestic and European network, including destinations to
On its first trading session the share price peaked at 34.90 Euros and one week later stands at 33.06 Euros, never dropping below a 32.50 Euros floor.
VUELING’s IPO is the first one in
The airline major shareholders -and top management- maintain the previously vented policy of expanding the airline markets and operations during the next few years while denying any intention to pursue any merging adventure with others.
CLICKAIR, another recently incorporated Spanish LCC, launched, backed and participated by IBERIA -and incidentally, as Vueling, also headquartered in Barcelona- has not excluded, however, the possibility to purchase VUELING, stating their belief in the need of a consolidation process, due to the fact that there exist too many LLC and network air carriers in Europe and the absolute need of going through a clarification and rationalization process.
