LONDON Oct 11 Two European companies cancelled
plans to IPO on Tuesday due to unfavourable conditions, joining
a growing number of firms to cancel listings this year amid
disappointing debuts for many that did brave choppy markets.
The withdrawals by UK gym operator Pure Gym and German real
estate company OfficeFirst are a setback for bankers who had
hoped a market window was finally looming, allowing them to
revive deals postponed earlier this year due to uncertainty over
China's growth, the oil price and Britain's Brexit vote.
Tuesday's cancellations in London and Frankfurt respectively
come just weeks after Telefonica pulled its plan to
float its infrastructure unit Telxius due to insufficient
"Given the challenging IPO market conditions, the Board has
decided not to proceed with a listing despite the strong
interest shown by potential investors", Pure Gym's chief
executive Humphrey Cobbold said.
Britain's blue chip FTSE 100 index hit a record intraday
high on Tuesday despite sterling's recent plunge, but bankers
expect smaller, UK-focused companies to be exposed to a possible
downturn of the British economy following the Brexit vote.
This could explain why investors are cautious about buying
into UK-focused companies like Pure Gym, which had announced its
plan to float just last month and hired Jefferies and J.P.
Morgan as global coordinators, Credit Suisse as joint
book runner and Rothschild as financial adviser.
OfficeFirst said two weeks ago it was planning to sell
shares worth up to 880 million euros in mid-October.
However its chief executive Michiel Jaski said on
Tuesday investors were not prepared to pay the price of 21-23
euros it was asking for shares.
Last week British energy supplier First Utility postponed
plans to list shares due to uncertainty created by Brexit and
because proposals to improve competition in the energy market
have not yet borne fruit. The company, which has plans to expand
in Germany, also said it was in no hurry to raise cash.
Money raised from initial public offerings (IPOs) fell by
more than a third to $79.2 billion in the first three quarters
of this year, the slowest such period since 2009, Thomson
Reuters data showed.
Driving bankers' hopes of an upturn was Denmark-based
payment services provider DNets' market debut last
month, which saw demand for its shares exceed expectations. But
the firm is now trading below its offer price.
UK-based software company Misys, medical device maker
ConvaTec and Telefonica's UK mobile operator O2 are among the
largest European IPOs expected in the coming few months. But
Telefonica, which was initially aiming for a December listing
for O2, is now considering to postpone the deal to next year,
sources told Reuters.
J.P. Morgan topped the league tables for both equity
offerings and public listings globally according to TR data.
(Reporting by Sophie Sassard; additional reporting by Dasha
Afanasieva; Editing by Alexandra Hudson)