Portugal's Fidelidade calls off IPO of healthcare arm

By Sergio Goncalves

LISBON (Reuters) -Portuguese insurance company Fidelidade, controlled by China's Fosun, has decided to abandon a planned listing of its healthcare arm Luz Saude because of capital markets instability driven by tension in the Middle East, it said on Tuesday.

Two weeks ago, Fidelidade said it planned an Initial Public Offering (IPO) of Luz Saude on Lisbon's stock exchange, which would include selling a minority stake and a capital increase of 100 million euros ($107.03 million).

In its statement on Tuesday it said it had dropped the plan following an assessment of instability in capital markets, aggravated by tensions in the Middle East.

"Market conditions to allow a correct valuation of the asset (Luz Saude) are not met," Fidelidade said, adding the main global stock indexes had lost value in recent days.

The insurance company said it would maintain its "commitment to the sustainability and long-term growth of the Luz Saude business" and would continue to evaluate options to "generate value".

An IPO would have marked a return of Luz Saude to the stock market after the healthcare group stopped trading on Euronext Lisbon in 2018.

Luz Saude's net profit rose 16.4% to 31.3 million euros in 2023, supported by a 11.3% increase in operating income to 667 million euros.

Fidelidade is 85% owned by Fosun International, while state-owned Caixa Geral de Depositos has the remaining 15%.

Fosun was also studying the potential for a partial IPO of Fidelidade, probably in 2025, a spokesperson for the insurance company told Reuters a month ago.

($1 = 0.9343 euros)

(Reporting by Sergio Goncalves;Editing by Catarina Demony and Barbara Lewis)