Renta4 Seeking Exposure
Spanish Financial-Services Firm's IPO to Lift Profile
By SANTIAGO PÉREZ
November 12, 2007; Page C3
MADRID -- Financial-services firm Renta4 sees its public debut this week as an opportunity to get wider brand recognition: It wants to become a boutique for Spanish savers.
Wednesday's initial public offering of the Spanish independent broker and money manager will test investor appetite at a time of uncertainty, as the once red-hot real-estate market that pushed the Spanish economy is now going through a substantial correction. Recent IPOs in Spain have priced at the low end of indicative ranges because of a lukewarm reception from international institutional investors.
Renta4's IPO pricing is scheduled for today, with a range set at €8.80 to €10.80 a share ($12.91 to $15.84), valuing the company at as much as €450 million ($660.1 million) in the offering of 11.3 million shares. ING Groep NV is managing the listing.
Renta4 co-founder and Chairman Juan Carlos Ureta is confident in his business's model. He thinks the float of a 27% stake in the company will allow investors to diversify at a time when Spanish savers are looking at alternatives that go beyond bricks and mortar -- literally, given the property slump.
"There's a negative market sentiment on real estate, construction companies and banks with operations linked to the property sector," Mr. Ureta said in an interview at the company's Madrid headquarters, which is filled with paintings by artists such as Pablo Picasso, Joan Miró and Roy Lichtenstein. "The fact that a Spanish financial-investment company is going public is significant -- 25 years ago this sector didn't exist. It now has some relevance in the economy."
Yet for all of Mr. Ureta's enthusiasm, market observers advise caution.
Investors have concerns about Spain, says David Moss, director of European stocks at U.K.-based F&C Investments. "Because Spain has had a strong housing market, it gets linked with the problems we have seen in the U.S. and the U.K. It's a perception issue."
Gonzalo Rodríguez, head of Spanish fund manager Gescooperativo, which manages about €3 billion in assets for a group of rural savings banks, says, "It's not the best time to sell
Spain abroad." He points to concern about the size and timing of an expected slowdown in economic growth.
Renta4 plans to use the IPO proceeds, estimated at more than €100 million, to widen asset-management operations and lower exposure to cyclical brokerage services.
Mr. Ureta, who travels extensively across the Iberian Peninsula to stay in touch with potential individual investors, wants to nab the types of clients who may not get much attention from the banks and global brokerage firms that focus on high-net-worth individuals.
"All kinds of investors are welcome," Mr. Ureta said. "We have a retail vocation, and we want to become like a Zara boutique chain with financial products," he added, referring to the popular Spanish clothing retailer.
The independent broker is targeting a 1% share of a €700 billion market. Its network of close to 60 branches across Spain has attracted nearly 87,500 clients, many of them small investors who now use Renta4's online securities-trading platform, which was among the first developed in Spain.
Source: http://online.wsj.com
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