Cinven Plans IPO of $11 Billion Polish EBay Rival Allegro

(Bloomberg) -- Allegro’s private equity owners are planning an initial public offering of the Polish online auction site, people familiar with the matter said, in what could be one of the largest European share sales this year.

Cinven, Permira and Mid Europa Partners have picked Goldman Sachs Group Inc. and Morgan Stanley as global coordinators for the deal, the people said, asking not to be identified because the information is private. Lazard Ltd. is advising on preparations for the potential listing, which could value the business at about 10 billion euros ($11.2 billion), according to the people.

The private equity firms are considering seeking more than 2 billion euros in the offering, which is planned for after the summer break, the people said. They are weighing Warsaw as a potential venue for the IPO, with the possibility of a second listing on another European exchange, the people said.

Allegro’s listing would be a welcome boost for the European IPO market, which is on track for the slowest first half since 2012, according to data compiled by Bloomberg. Fundraising on exchanges in the region is down 42% from a year earlier, even after the May listing of coffee company JDE Peet’s BV, the data show.

Rising Demand

“The company seems to be an excellent proxy for Polish growing consumer demand. It got a turbo-boost from the lockdown,” Lukasz Wachelko, an analyst at brokerage Wood & Co., said by phone Monday. “The large scale of the transaction should provide enough liquidity to attract interest from global investors.”

More banks could be added to the deal at a later stage, according to the people. Deliberations are ongoing, and details of the potential Allegro listing could change, the people said. Representatives for Allegro, Goldman Sachs, Lazard, Morgan Stanley and the private equity firms declined to comment.

Any deal could come close to displacing Polish state-owned insurer PZU SA’s 2010 share sale, which raised the equivalent of 2.1 billion euros, as the biggest-ever listing from the country, according to data compiled by Bloomberg. Allegro, a marketplace similar to EBay Inc., is among e-commerce operators benefiting as people go online to buy everything from clothes to homeware during the coronavirus lockdowns.

Coronavirus Boost

The number of firms offering goods on its site has more than doubled in the past 12 months, with 15,000 new sellers joining in recent weeks, Chief Commercial Officer Damian Zaplata said at a June 3 conference.

“The boost e-commerce got from the lockdown increases the probability the IPO will take place,” Krzysztof Kawa, an analyst at Ipopema Securities SA, said by email.

Allegro was started in 1999 and now has more than 21 million registered users, making it one of the largest e-commerce platforms serving eastern Europe, according to its website. Cinven, Permira and Mid Europa agreed to buy the business from South Africa’s Naspers Ltd. for $3.25 billion in 2016.

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