Luz Saúde – the floatation of the decade

Lisbon’s stock market, Euronext Lisboa, is gearing up for what will be Portugal’s biggest floatation in a decade.

The private health group Luz Saúde, which is held by the insurer Fidelidade, will be the object of the most important Initial Public Offer (IPO) since the Portuguese postal service CTT was privatised in 2013.
And if he IPO achieves the intended valuation, the healthcare provider will become the 12th major listing on the index of companies listed on the Euronext Lisboa PSI 20 Index.
Over the past 10 years there have only been six IPOs on the Portuguese stock market over a period which saw 18 companies quit the market.
One of these six companies that joined the index was Luz Saúde which at that time was called Espírito Santo Saúde and was an Espírito Santo Group (GES) company. The banking, property, resorts and insurance group collapsed in 2014.
More recently, the renewables company Greenvolt, founded by entrepreneur João Manso Neto, the former CEO of EDP Renováveis, created a huge buzz in Lisbon when it was floated in 2021. Only CTT in 2013 was of an equal importance and dimension for Lisbon’s stock market.
The news agency Reuters broke the news that Fidelidade was studying the possibility of floating Luz Saúde on the stock market.
Later, the news source ECO discovered more details about the proposed operation. Fosun, the Chinese giant which owns Fidelidade, had decided to sell between 30% and 40% of its capital in the insurer; the company being valued at just over €1Bn.
The banks which will coordinate the IPO have already been selected and the floatation is set to take place at the end of the year.
In order to raise this €1Bn, Fidelidade will bag around €300 million from the Luz Saúde IPO, doubling the amount netted when the healthcare provider was floated last time around in 2014, (€149.8 million)
This IPO will also exceed the amount netted by the Greenvolt IPO two years ago (€205 million), but not as much as the €580 million raised when the Portuguese State privatised the CTT postal service 10 years ago.
However, the CTT IPO in 2013 resulted in the sale of 70% of the capital but in the case of Luz Saúde, it will float at a potentially higher valuation.
Looking at all the IPOs on the Lisbon stock market this century, the return of Luz Saúde has the potential to be the fourth largest operation since 2001, of fifth if it doesn’t manage to net as much as the electricity distributor REN (€323 million).
The Number 1 IPO in Portugal was when EDP Renováveis floated in 2008 bringing in €1.566Bn. Galp Energia comes in 2nd place raising €1Bn IN 2006, followed by CTT in 2013 (€580 million), REN (€325 million) 2007, Greenvolt (€205 million) 2021, Martifer (€200 million) 2007), Caixa Económica Montepio Geral (€200 million) (2013) and Espírito Santo Saúde (€150 million) in 2014.