Bankers were adamant Golden Goose, maker of the €500 emergency trainers favored by Taylor Swift, was poised to go public.
After more than 10 months of preparation, the Italian footwear brand already sought to raise around EUR 600 million in the Milan listing on Friday. It reported strong sales in the first quarter. At least seven banks were building their IPO book, which was oversubscribed by Tuesday. Fund manager Invesco has agreed to be a core investor.
But Francesco Pascalizi, the dealmaker responsible for the private equity investments of Permiro owner, suddenly got cold feet.
Permira’s decision to pull the plug on the highly anticipated listing late on Tuesday shocked advisers and investors committed to fundraising. It dealt a blow to the tentative recovery of the European IPO market, and more companies that planned to list this year may now err on the side of caution and postpone their plans as a result of the aborted flotation.
The last-minute collapse also underscores Permira’s jitters in the wake of a string of underperforming listings, including the listing of Dr. Martens in 2021. The shoe maker has issued five profit warnings since then, and its stock has fallen 80 percent.
The talks leading up to the decision were contentious, according to many people directly involved in the preparations for the listing. The difference of opinion between advisers and their private equity client led to “long and heated discussions,” according to one insider.
“With all due respect, what the hell are you talking about,” one counselor yelled during the call Tuesday, according to other people on the line.
“It looks bad to pull out two days before a debut, but it looks a lot worse when the stock is down 20 percent in the first week of trading,” one banker noted on Wednesday.
“Permira can’t afford another embarrassment after Dr. Martens,” said another.
Executives at the €80 billion London-based buyout group became concerned last week, according to people close to the negotiations. Shares in LVMH and puffer jacket maker Moncler plunged after French President Emmanuel Macron’s surprise decision to call early parliamentary elections raised the prospect of a far-right government at the helm of the eurozone’s second-largest economy.
As investors cut their exposure to European stocks, “big names that had committed tens of millions” to the Golden Goose IPO canceled their orders, one person close to the negotiations said.
It didn’t help that major investors like BlackRock and GIC stayed away, according to people familiar with the bookbuilding. Permira feared a sell-off in the aftermarket, people close to the buyout group said.
But the bookrunners pushed back until the end: the mix of investors was strong enough to continue, they argued. To be sure, the IPO price would be close to the bottom of the range at €9.75 per share, valuing the company at less than €2bn – much less than the €3bn previously speculated.
But the book was oversubscribed about four times at that price. And the company’s top management, led by Silvio Campara, believed the valuation was “fair,” as was Permira, according to the three people.
The private equity group bought Golden Goose, which is based near Venice, just before the pandemic led to a global lockdown, with Italy among the worst-hit countries.
As the global luxury sector faces a slowdown this year, Golden Goose reported a 12 percent rise in sales in the first quarter.
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However, Permira’s record was a sensitive issue, market participants say. French cyber security company Exclusive Networks, which listed at €20 per share in 2021, is now trading at just €19. TeamViewer and Allegro, which the firm went public in 2019 and 2020, are both trading below their IPO price.
Permira sold the last of its stake in Hugo Boss in March 2015, shortly before its share price plummeted, now more than 60 percent below the level at the time of the buyout group’s exit.
Permira initially tried to bring big institutional Asian investors on board, but that didn’t work out, according to three people familiar with the talks. For example, Singapore’s GIC was approached to be an investor in the deal but decided against it. GIC declined to comment. Another opt-out was BlackRock, the people said. BlackRock could not immediately be reached for comment.
“The risk of it turning into a mediocre IPO was greater than the benefit of continuing,” one participant said.
Permira may try to revive the listing in the next few weeks, some advisers said. But his decision not to proceed may have taken the momentum out of the entire IPO market in Europe. Other IPO candidates are also thinking twice about their plans, including Tendam, the private equity-owned Spanish retailer. Tendam declined to comment.
However, Campara said he hopes the IPO preparations will not go to waste.
“Golden Goose is a great love story and our priority has always been to tell that story to the right investor community,” he told the Financial Times after the decision to shelve the company’s listing. The roadshow made investors “see Golden Goose not only as a strong and profitable business, but as a true global Next Gen luxury company.”