Milan airport operator scraps IPO on weak investor interest

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Published: December 8, 2012

Milan airport operator SEA has scrapped a planned initial public offering (IPO) due to a lack of investor interest.

SEA, which operates Milan’s Linate and Malpensa airports, was aiming for a Dec. 6 listing on the Milan stock exchange, with a free float of 24%. However, the board was forced to call off the IPO late Friday because the subscription rate failed to reach 50% at the end of the book building process. The deadline for institutional investors to place orders was even extended by a few hours in an eleventh hour bid to attract more interest.

Market observers have blamed the high proposed price range, which would have valued the operator at between €800 million ($ 1.05 billion) and €1.1 billion. Investor interest was reportedly limited to about one-third of the shares offered for sale and only at the lower end of the price range.

SEA is owned by the city of Milan (54.81%), Italian fund management company F2i (29.75%) and the province of Milan through a holding company—ASAM (14.6%), as well as a number of other minor shareholder.

The collapse of the IPO has intensified the war of words between the two major shareholders, with the city of Milan reportedly threatening to file a complaint against F2i with market regulator Consob.

F2i disputed both the date and the proposed price of the sale, but the city of Milan was anxious to move the sale forward to relieve its strained financial situation. It had reportedly hoped to raise €80 million from the IPO.

ASAM has since said it plans to sell the 14.6% held by the cash-strapped province of Milan through an auction process.

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