Europe looks to follow-on

4Q Financial Market Preview

Europe looks to follow-on

Confidence in Europe has continued to grow from last quarter's tentative predictions, with both bankers and investors now expecting a funding window for public companies to open early next year, followed by an IPO window.

Europe's leading private equity names are therefore preparing for an IPO opportunity in 2004. But their window still depends on what happens in the U.S. Thus all eyes this quarter and next will focus on how U.S. companies fare.

Putting force behind the hopes of a window was last week's news that Actelion Ltd. (SWX:ATLN, Allschwil, Switzerland) raised CHF143.8 million ($107 million) in a convert deal led by CSFB. And last month, cancer and neurological company Oxford BioMedica plc (LSE:OXB, Oxford, U.K.) raised £22.1 million ($35.4 million) through a rights issue of 130 million shares (see Ebb & Flow, Sept. 22).

The last time a European biotech company raised debt was in 1998. And the last time an unprofitable biotech company raised as much in a follow-on offering was in May 2001, when NicOx S.A. (NM: Nicox, Sophia Antipolis, France) raised E69.8 million ($61.5 million).

Market terms

The view in Europe is that the markets will continue to improve, although not at the same pace as they have run since the March turn. From the market bottom in early March through the end of

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