Market jitters hit big listings
INVESTOR jitters over the UK’s economic prospects were laid bare after the price tags for two of London’s biggest stock market listings this year were slashed by up to a third.
Waste management company Biffa and banking software giant Misys have been forced to scale back their ambitions dramatically after the sharp fall in the pound as would-be buyers of their shares drive a harder bargain.
Biffa yesterday priced its shares at 180p for a £450million market value, well down on the expected price range of 220-270p, which would have valued it at up to £675million.
Meanwhile, Misys is likely to have to knock about £1billion off its proposed £4.5billion valuation as it moves towards a return to the stock market after four years. This will reduce its chances of joining the elite FTSE 100.
Biffa’s chief executive Ian Wakelin, pictured, hailed its return to the London Stock Exchange as a “significant milestone”, which endorsed its business model, strategy, track record and prospects. He added: “The company is well placed to exploit structural changes in the UK waste market, leveraging its diversified and integrated operations right across the country. We welcome our new shareholders and look forward with confidence to the next stage in the development of Biffa as a public company.” Fitness chain Pure Gym and outdoor retailer Mountain Warehouse are among several companies to have shelved float plans recently, although LED lighting products maker Luceco did press ahead yesterday with its listing to raise £26million, valuing the business at £209million. Scott McCubbin, business adviser EY’s UK and Ireland IPO (initial public offering) leader, said: “The market was reasonably stable until a couple of weeks ago. This currency devaluation has caused quite some alarm in the IPO market, which is fickle. “When these businesses intended to float the market was in pretty good shape and people saw green shoots. “They still have good stories underpinning them, but the market changes quickly and the currency shift causes uncertainty.” He added: “I still see a pipeline of floats coming through but perhaps more towards 2017.”