Norway IPO trends and insights

2019 will see a cautiously optimistic outlook for IPOs after a fallow 2018 that finished on a low.

• Global instability and market turmoil continue to have an impact

• Optimism with strong 2019 IPO pipeline and Merkur Market successes

• Proposed takeover by Euronext represents an opportunity to harness international markets expertise

Whilst many companies considered listing in 2018, it ultimately proved a weak year for Norwegian IPOs. 1H 2018 saw a number of transactions, including the NOK 7bn (EUR 700m) IPO of Elkem in March, one of Norway's largest ever IPOs. However, Q3 saw few listings and three announced deals were pulled in Q4. The weak end to the year followed turmoil in the markets, with the Oslo Stock Exchange main index falling by 15.5% from a high point in September.

Looking ahead, the start of 2019 looks like it will be subdued by significant uncertainty on a global level, with an impending Brexit, trade wars, Chinese economic unpredictability, and political instability in the Eurozone all leading to a more cautious approach in the market. Falling share prices and weak capital markets in Q4 specifically raised doubts as to the likely success of an IPO placement in the first half of 2019. Nonetheless, a robust deal pipeline for 2019 reflects a continued optimism, and if the markets bounce back, 2019 could prove to be a good year for new listings on the Oslo Stock Exchange, particularly in the second half of the year. We expect that the comparative strength of the Norway economy and the continuing low interest rate environment will ensure that Oslo Stock Exchange will remain an attractive option for companies seeking to access the capital markets.

While new listings on the Oslo Stock Exchange and Oslo Axess have been relatively limited, Merkur Market, an unregulated multilateral trading facility (MTF) opened in 2015 by the Oslo Stock Exchange, is proving increasingly successful and saw 13 new listings in 2018. Merkur Market represents a first step in accessing the capital market for many companies and could be considered a pathway towards a full listing. As a result, we may see a number of these 'mature' into listings on the Oslo Stock Exchange or Oslo Axess.

Following a few years of significantly lower IPO activity in Oslo than in Stockholm, the recent proposed offer from Euronext, the Netherlands-based group that manages the national stock exchanges of five European countries, to acquire the Oslo Stock Exchange, could potentially shake things up. It would follow Euronext's recent acquisition of the Irish Stock Exchange and would be another key milestone in the group`s "vision to build a consistent pan-European marketplace offering best-in-class capital markets services." It raises the question of whether an association with an international operator such as Euronext would make the Oslo Stock Exchange more attractive as a listing market.

Wiersholm's capital markets team

Our capital markets team have had a leading role in many of the largest and most complex listings and issues in Norway in recent years.

Our team has extensive transaction experience with both national and international placements. Several of our lawyers have experience from the Norwegian Ministry of Finance, the Oslo Stock Exchange and the Financial Supervisory Authority of Norway. We are also Norway's leading provider of legal services in regulatory matters, including advisory services to investment firms in connection with organisation and operation.

Wiersholm's recent capital markets highlights

Recent deals we have advised on include:

- Fjordkraft Holding IPO – advised ABG Sundal Collier and SpareBank 1 Markets AS as Managers

- MPC Container Ships private placements and listings – advised MPC Container Ships on four private placements, its listing on Merkur Market and its subsequent transfer from Merkur Market to Oslo Axess

- Borr Drilling private placements and listing – advised Borr Drilling Ltd on USD 800 million and USD 650 million private placements and its listing on the Oslo Stock Exchange

- Saferoad Holding IPO – advised Carnegie and Nordea as Joint Global Coordinators

- Komplett Bank IPO – advised Komplett Bank on its listing on the Oslo Stock Exchange

- Magseis USD 150 millon private placement – advised Magseis ASA on its private placement to finance the acquisition of Fairfield Geotechnologies' Seismic Technologies business.