Economic Analysis: Puig’s Initial Public Offering

The Spanish group Puig is finalizing the last details to make its debut on the stock exchange. The company has announced its intention to seek more than 2.5 billion euros from the market and has detailed its plan to go public.

Strategy to Ensure Majority in Decision-Making

The company will carry out a capital increase of 1.25 billion euros in the form of B shares, which have fewer voting rights. The A shares will have five voting rights, while the B shares will have only one. This way, the family ensures it has the final say in the strategic decisions of the company.

This is a similar formula to what Inditex used, as well as Meta, whose main decisions are still made by the group’s founder, Mark Zuckerberg.

Puig achieved the best results in its history in 2023, with more than 4.3 billion euros in revenue and over 800 million euros in gross profit.

Now the company can boast its strength in meetings with investors. Being a family-owned company with more than a hundred years of history, it makes sense for the company to divide its shares between A and B shares, retaining the A type through its investment company Exea.

Puig maintains family control over the organization and seizes the opportunity to raise capital and expand its business horizon.

Advisory

One of the main advisors in the operation has been Goldman Sachs, which will work with JP Morgan to coordinate the global transaction of the operation. Santander, Bank of America, CaixaBank, BNP Paribas, BBVA, and Sabadell have also been involved. Legal matters have been handled by Linklaters, Cuatrecasas, and David Polk & Wardwell.

Going Public

The Puig group has announced its intention to apply for the listing of its shares on the Stock Exchanges of Barcelona, Madrid, Bilbao, and Valencia and to trade on the continuous market. The company plans to ring the bell for its stock market debut in early May.

The company has been sounding out potential investors for weeks, in a process known as early look. Starting this week, the next step, known as pilot fishing, will begin, in which the company and its advising banks try to achieve preliminary agreements with large investors. After this step and following the publication of the IPO prospectus by the National Securities Market Commission, expected by the end of the month, meetings with investors and analysts will start to try to set an appropriate debut price for the shares.