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Enel green power fails to light up Milan, Madrid bourses
Madrid, Nov 4 2010
Enel Green Power (EGP) made a less than stellar debut on the Milan and Madrid bourses today, following a sluggish EUR2.6 billion ($3.7 billion) initial public offering (IPO) in which parent company Italian utility giant Enel was forced to drop the price to entice reluctant institutional investors.
"We didn´t buy it. We felt it was too expensive. Having said that, at EUR1.60 it was getting down to levels which we thought would have attracted purchasers," said Edward Guinness, who co-manages two alternative energy funds at Guinness Asset Management in London.
"At the moment, the market will not pay for some of the valuations it has historically paid up for - it´s a sector which to some degree is out of favour," said Charlie Thomas, a fund manager at Jupiter Asset Management in London.
"If Enel Green Power had come to the market even last year or before it would have probably achieved nearly double what it did now," Thomas added.
"The broader implications are that you are seeing pretty good price discrimination - conventional pricing mechanisms are being applied to value," commented Guinness. "I think it is excellent that four large-scale national utilities are now listed. It creates a good benchmark for the smaller companies to be priced off."
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