They made a lot of money on Allegro.  Selling shares in ABB, as usual, reduces the WIG20

It is already a tradition on the stock exchange that major shareholders of Allegro sell large blocks of company shares in the spring. What may be worrying is that the transactions are taking place increasingly, because they also happened in the fall last year. In total, together with the deal announced on April 16, this is ABB's fourth transaction for Allegro shares in just over 3.5 years since October 2020, i.e. since its debut.

They have been selling shares since their debut

Let's go back to this moment for a moment. The share price set in the IPO at PLN 43 implied a total valuation of PLN 44 billion – the highest on the WSE at the time. The offer itself – PLN 9.2 billion – was the largest in the history of the WSE And One of the largest companies in 2020 in Europe. A moment later, on October 27, Allegro hit historic highs when its valuation approached the astronomical PLN 100 billion, One paid share is PLN 98.78.

Coming March 2021 Private equity funds that control Allegro, such as Cidinan, Permira VI Investment Platform and Mepinan It began selling shares under the ABB procedure. The shares then rose to PLN 60, valuing the package of 76.5 million shares at approximately PLN 4.6 billion. I remember that Major shareholders were also sold in their debut, a few months ago. Only PLN 1 billion out of PLN 9.2 billion went to the company.

What is ABB and who needs it? We explain

An accelerated bookbuilding (ABB) process is a transaction executed at the request of entities wishing to sell a larger block of new or existing company shares quickly. They are helped in this by investment companies that search for buyers to buy securities in group transactions so as not to affect the current stock price.

We had to wait more than two years for the next deal, until June 2023. After that, the three main shareholders sold 53 million shares at a price of PLN 32.25.
In total, the value of the package amounted to more than PLN 1.7 billion. The deal was announced just 5 months after ABB's second deal, and was a bit of a surprise. In October last year, two funds (Cidinan and Mepinan) this time sold 42 million shares of the e-commerce giant at a price of PLN 29, for a total of more than PLN 1.2 billion. As a result, Mebinan's stock fell below 5%. In the shareholding structure.

After the fall, investment platform ABB Permira VI held 262.92 million shares, accounting for 24.88 percent. In the shareholding structure, Sidinan controlled 228.15 million shares, or 21.59 percent. Mepinan has 50.7 million shares remaining. A total of 541.78 million, or 51.26 percent. Involved.

Initially, 50 million ABB shares were scheduled to be offered for sale, which was announced on April 16, but… The pool has been increased to PLN 65 million at a fixed price of PLN 29.25 per share, giving the stake a valuation of just over PLN 1.9 billion. sharing Cidinan and Permira VI investment The offer is 45% for each of them, and Mebinan’s share is 10%. The shares offered. After completing the deal, the three largest companies will have 476.78 million shares, or more than 45.1%.

Promotion on Allegro affects the WSE

It turns out once again that ABB on Allegro influences the WSE. In March 2021, a few days after the consolidation, the WIG20 suddenly gave up 1% in the March 16 session. In the evening after the session when the ABB Allegro was announced. This was most evident in June last year, when market observers could not find a justification for the sudden drop in the price of WIG20 in the last hour of the session, which had so far risen by 1.3%. Declines in the WIG20 also occurred in October last year, although they were not as large as those that occurred back on April 16, 2024, when the WIG20 from 14.50 suddenly fell by more than 30 points or 1.3%.

It seems natural to combine these two facts, leading to the conclusion that institutional investors were already aware of ABB Allegro being officially announced after the session during the session as part of the wall-crossing action. To participate in such an offering, investors typically sign a non-disclosure agreement, which allows them to “cross the wall” and thus become, as it were, insiders with access to material non-public information.

To participate in the offer, they had to raise at least part of the funds needed to buy Allegro shares. So they sold shares of other companies in their portfolios. Naturally, these were supposed to be stocks of larger, more liquid companies. Hence the significant weakness of the WIG20 compared to the underlying exchanges in the previous session.

Considering the number of shares remaining for the three main shareholders of Allegro (476.78 million shares), the situation may be repeated more than once, since their desire to exit (at least partially) from the investment they entered into in 2017 is clearly visible. Cidinan, Permira and Mid Europe Partners (which controls Mepinan) bought Allegro from South Africa's Naspers for approximately US$3.25 billion (PLN 12.25 billion at average USD/PLN exchange rate as of 2017). To date, the funds have sold shares worth PLN 9.4 billion in ABB alone. In addition, they raised PLN 7-8 billion in the IPO, and still own shares worth about PLN 15.7 billion at the price as of Tuesday, when investors raised the share price by more than 5% based on information about excess demand in supply. . Big profit.

Michal Kopecky

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