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| Pegasus Airlines $330 million IPO | |
| Global coordinator | Barclays |
| return to the Deals of the Year 2013 index | |
Another year of volatility and underperformance in equity markets kept the majority of IPO candidates from emerging Europe on the sidelines in 2013. Of the few that did venture out, Turkey’s Pegasus Airlines caught the eye for its ability to negotiate a fragile market environment and resilient aftermarket performance.
The low-cost carrier – Europe’s fastest-growing airline – had initially planned to list in 2011, but postponed the deal in response to deteriorating market conditions. The company and its main shareholder, the Sevket Sabanci family, subsequently appointed a new sole global coordinator, Barclays, and began meeting investors again in January last year.
An intense marketing campaign generated substantial interest from a broad foreign investor base, including UK equity investors attracted by Pegasus’s international operations as well as traditional emerging markets funds. As a result, the institutional tranche of the TL590 million ($330 million) deal – 85% of which went to fund an expansion of the airline’s fleet – was nearly two times oversubscribed despite considerable market volatility during the five-week bookbuilding process.
The final price of TL18.40 a share, set in late April, was in the middle of the marketed range and was at a 6.7% premium to national carrier Turkish Airlines. The 15% secondary proceeds received by the Sevket Sabanci family were ringfenced to support the share price, but this proved unnecessary. The stock traded up in the aftermarket and remained buoyant throughout the year despite concerns around political unrest in Turkey, reaching a high of T43.50 in late November.
The largest IPO from Turkey since 2010 and the largest airline IPO in Europe in more than seven years, Pegasus’s deal was hailed by investors as a rare example of a well-marketed listing from CEE with realistic pricing.
