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By Noor Zainab Hussain and Dasha Afanasieva
LONDON Oct 17 Waste management specialist Biffa
priced its initial public offering (IPO) at a lower
than expected level on Monday, highlighting continuing
difficulties faced by companies seeking to raise cash on
European capital markets.
Biffa priced its London listing at 180 pence per share,
giving a market capitalisation of 450 million pounds ($560
million). It had previously been expected to list at between 220
pence and 270 pence per share, according to Thomson Reuters
International Financing Review.
The period before November's U.S. presidential election had
been expected by bankers to offer a window for a series of IPOs,
but market volatility and subdued investor demand have proved
disruptive despite stock indexes being close to record highs.
British auto parts company TI Fluid Systems,
energy supplier First Utility, gym operator Pure Gym and German
real estate company OfficeFirst, which found investors were not
willing to stump up the asking price, have all cancelled or
postponed IPO plans in recent weeks.
Software company Misys said last week that it planned to
raise 500 million pounds by listing at least 25 percent of its
shares on the London Stock Exchange, though a source close to
the deal told Reuters on Sunday that it was expected to reduce
the size to about 20 percent because of weak investor demand.
Those who have braved the markets, such as green energy
business Innogy and payment services provider Nets
, had lacklustre debuts.
However, there was one bright spot for smaller companies
when Luceco, a manufacturer and distributor of LED
lighting and wiring products, priced its London IPO at 130 pence
per share, raising gross proceeds of 26 million pounds.
Biffa, which was forced into an emergency financial
restructuring after the 2008/09 financial crash, said it would
receive 262 million pounds in IPO proceeds, which will largely
be used to reduce debt. It said it is issuing about 47.2 percent
of its share capital.
Citigroup and JP Morgan are joint global coordinators for
the IPO and are joined by HSBC as joint bookrunners.
($1 = 0.8042 pounds)
(Reporting by Noor Zainab Hussain in Bengaluru and Dasha
Afanasieva in London; Editing by Sunil Nair and David Goodman)