Iberdrola, Spain’s biggest electricity company, has completed the merger with the US firm UIL and the new group Avantgrid is now trading on the NYSE.
Shares in Iberdrola USA (81.5% of which is in the hands of Iberdrola and UIL owns the remaining 18.5%) began trading yesterday at 38,75€/share (310 million shares), registering a fall over the day of 6.7% to 36,12€/share (market capitalisation of $11.2 billion).
“Although Avantgrid’s market debut was tarnished with this share price drop, it was a day of overall losses (S&P down 1.5%). In any event, the stock’s market capitalisation is still around the $11.500 billion in our estimates (PER 2015e 19,8x),” Bankinter analysts said.
Avantgrid’s listing is the culmination of an operation which was announced in February. The merger has created a company which, according to 2014 figures, had a combined EBITDA of $2.014 billion (22% contributed by UIL and 78% by Iberdrola USA).
UIL currently trades with a market capitalisation of $2.200 billion (EV $4.400 billion) and EV/EBIDTA’15 multiples of 10.2x and PER’15 of 19.8x.