French cable service operator Numericable on Monday laid the groundwork for an IPO next week, valuing the business at more than 5.0 billion euros and highlighting renewed interest in European high-speed Internet access.
This price makes the company's November 8 initial public offering the biggest on the Paris stock market in four years.
The company set the issue price at 20.30-24.80 euros per share, putting a valuation on the business of 5.06-5.57 billion euros ($7.0-7.7 billion), chief executive Eric Denoyer told a press conference.
This valuation includes debt of 2.75 billion euros.
The issue comes in a climate of increase attractiveness to investors of cable operators in Europe because of growing demand for bandwidth to cope with rising traffic on the Internet.
Denoyer said: "The Internet access capacity used by each household has doubled in the last 18 months."
The growth of Numericable was linked to the fact that "very high-speed access is taking off in France," he said.
British operator Vodaphone is in the process of buying German cable operator Kabel Deutschland for 7.7 billion euros, and the US company Liberty Global has taken control of British firm Virgin Media for 17 billion euros.
The last big IPO in Paris concerned retirement home company Medica more than three years ago. The operation valued that business at 623 million euros.
The flotation and stock quotation by Numericable concerns about 652 million shares of which 250 million are new shares as part of a capital increase, and 402 million by means of the sale of existing shares held by shareholders, the investment funds Carlyle and Cinven.
If the shares are well received by investors, the total number of shares on offer could be increased by 15.0 percent.
The process of placing the shares began on Monday and will end on November 7.
Numericable said that in the first nine months of the year it achieved a net profit of 60 million euros and earnings before interest, tax, depreciation and amortisation of 436.3 million euros. Sales totalled 968.9 million euros.
The company said that for the whole of this year it expected to achieve an Ebitda figure of 610-620 million euros, and to raise sales slightly.
The company, which already invests 300 million euros per year, intends to raise this by 220-230 million euros in the period 2014-2016, and to complete the upgrading of its network so as to equip 8.5 million connections with optic fibre, from 5.0 million now.
This should enable the group to raise growth from 2.0 percent to 5.0 percent per year in 2014-2016 and to achieve an Ebitda figure of 50.0 percent from 47.0 percent in 2012, it said.
KABEL DEUTSCHLAND HOLDING