Metrovacesa - a Spanish commercial real estate heavyweight during the last boom - has made a comeback to the Madrid Stock Exchange placing €645 mln worth of shares.
The company placed just over 39 million shares at a price of €16.50, in a deal valuing the business at €2.5 bn.
It initially hoped to place the shares at €18 to 19.5 apiece but had eventually to cut the pricing of its flotation.
The residential developer, whose main shareholders are Spanish banks Santander and BBVA, was taken private by the banks in 2012 following the implosion of the Spanish real estate market.
Metrovacesa said the flotation was aimed at widening its shareholder base to ease access to capital markets and financing for projects.
'We are extremely excited to bring Metrovacesa to market. We believe that it is the right time in the cycle to be long in land as it provides unique visibility of future profitability and the ability to generate a significant amount of cash flow that can be returned to shareholders in the coming years,' said CEO Jorge Perez de Leza.
Metrovacesa focuses on residential development after spinning off its commercial real estate business, which merged with Spanish REIT Merlin Properties last year. It owns the largest land bank among the Spanish housing developers with a value of €2.6 bn and the potential to build 37,500 homes.
As part of the deal, Santander and BBVA have reduced their holdings to 53% and 21% respectively, from 71% and 28.5% previously.
This is the third major initial public offering by a Spanish residential developer following the listing of Neinor Homes and Aedas last year.
Aedas – owned by US private equity firm Castlelake – sold €665 mln worth of shares, priced at the bottom of the €31.65 and €33.15 range. This resulted in an market capitalisation of just over €1.5 bn.
Lone Star listed Neinor's shares on the Spanish continuous market in Madrid last March in the largest-ever IPO for a European residential developer and the first IPO by a developer since the onset of the financial crisis.
Priced at €16.46 per share, the oversubscribed IPO gave Neinor a market capitalisation of €1.3 bn. Lone Star retained a 40% share in the residential developer.
