Hochtief Concessions is seen as exceptional in that the parent Hochtief would not sell below a certain level – because it wanted banks to deliver on their promises. Ordinarily the parent is less concerned about valuation as it remains a major shareholder and the separate listing should result in an improved valuation for the remaining stake.

Underlining this, Norwegian oil giant Statoil is to spin off its energy and retail business (E&R) via an IPO in the fourth quarter of the year. The deal will be one of the largest in Norway this year with one analyst yesterday predicting a market capitalisation for the business in the NKr6bn-NKr12bn (US$1bn-$2bn) range.

E&R runs 2,300 petrol stations across the Nordic region, Russia and Poland. It has a 23% market share in Scandinavia and will retain the use of the Statoil brand. Another part of the business sells marine and aviation fuel, and has a small renewable energy unit that produces wood pellets.

Statoil, which will retain a “significant” stake after the IPO, believes the deal will be attractive to investors because there is no peer of a similar size currently listed in Oslo. A final board decision will follow a consultation period with employees of the business.

Bookbuilding began today on the NKr350m (US$60.2m) IPO with the company offering up to 14m primary shares, representing a freefloat of 80%. The price range has been set at a relatively wide NKr25-NKr33.

Investors are basing their valuations for the non-producing company on the number of exploratory wells the company has, and educated guesses about how much oil they might produce in the future. On a current EV/Boe basis the range values the stock at US$0.10-$0.20. That gives a healthy discount to the main peer Detnor, which currently trades on a Ev/Boe of US$0.30. 

Books close on February 3 and trading starts on the Axess market on February 5. Enskilda, Pareto and Platou are joint bookrunners.