The sordid site too hot for the City to handle

Brokers reject adultery dating firm’s float bid

IS THERE nothing City brokers will not touch to make money? From gambling firms and tobacco giants to questionable insurance processing companies, it seems there is almost no company that cannot find someone to raise money for it on the stock markets.

But now, a highly- controversial Canadian start-up may have finally crossed the City’s moral red line.

A dating website for married people that calls itself the ‘Google of cheating’ has made hard-nosed brokers say they feel ‘queasy’ about getting involved.

Institutions that pump pension pots into companies are known to be reticent, and previous attempts to float the company on overseas stock markets have been pulled after ethical concerns scared away investors.

But that hasn’t stopped Ashley Madison, a website whose slogan is ‘Life is short. Have an affair’, from trying again to go public.

The company last week announced it wanted to raise £130m on the Lon- don Stock Exchange – which would value it at £660m. The firm said it wants to use the money to push into ‘the international market of adultery’, taking its reach beyond the 46 countries where it already operates.

But it has faced a backlash from brokers who refuse to deal with the company to social campaigners who say it facilitates family breakdowns.

Sam Smith, chief executive of FinnCap, said: ‘As a broker you have to be mindful of your own reputation and that the whole team has to believe in the business. It’s virtually impossible in this case for anyone to get comfortable with the business model.’

Another brokerage chief executive said investors would be in ‘uproar’ if they found pensions put into the firm. ‘A lot of brokers don’t want to be anywhere near it,’ he added

Other dating websites, such as Cupid.com, have successfully raised money on the London markets. But the nature of Ashley Madison’s business has left some firms feeling uneasy about being associated with it. Some i ndividual bankers privately don’t want their names near the company – for fear of upsetting their spouses, if nothing else. The other hurdle the company faces is that institutions – such as pension funds – that would normally pump money into the firm are also likely to draw the line.

The chief executive of one major City broker, who asked not to be named, said: ‘I think we would probably feel a bit queasy about getting involved in it.’

The group previously failed to float in Canada, where it is based, because investors were not keen to invest in a company they viewed as immoral.

Its existing private shareholders, mostly based in the US, have all been granted anonymity by the company. The group has also ruled out listing on any of the stock markets in Asia due to ‘Asian culture and views on infidelity’. But Christoph Kraemer, one of the company’s directors, said that the UK would be an ideal place to sell its shares – in comments that have caused fury.

He told the Bloomberg financial website: ‘I’m half French and half German, and I think Europeans have a more laid back, laissez faire attitude to infidelity.’

Many countries and organisations have taken a stand against the website. Singapore and South Korea have banned it. Its websites are also banned from appearing in search results on the Microsoft- owned Bing search engine, and the firm is banned from placing any TV adverts in the UK.

But that hasn’t stopped it trying to tap into London pension institutions for its funding.

However, critics of the website said that it had ‘no place’ on the London markets.

Harry Benson, research director of the Marriage Foundation, said: ‘I seriously hope that any professional investor worth their salt will think twice before putting savers and pensioners’ money into this marriage-breaking organisation.’

Ashley Madison’s parent company Avid Life Media also owns other dating websites that target older men and women respectively – though none are as controversial as its flagship site. It claims annual sales have risen four-fold since 2009, last year hitting £77m.

Noel Biderman, Avid Life’s founder and chief executive, said he thought it was ‘unhealthy’ for City institutions to criticise the company’s morals, and said he found the US markets too ‘puritanical’ when trying to float.

He said there was ‘no moral line’ he would not cross to make money if the business was legal.

‘I’m a businessman, and driven by demand,’ he said, adding that people would invest ‘if the company has revenues and profits’.

He said the firm had held talks with two banks to help the float, though admitted they might still pull out ‘at the 11th hour’.

The kind of investor he wants to attract would be hedge funds, wealthy families or customers of the website, he told the Mail.

Anastasia de Waal, deputy director of the Civitas think tank, said: ‘This company and its website are totally sordid. In reality what it is saying is “bring your relationship to us and we will destroy it”.’

Evidently City workers fear that the same could happen to their reputation if they become entangled with the company.