Failed floats on rise as City says no

THE number of companies that have abandoned plans to float on the stock market is set to surpass last year, data from financial information group Dealogic indicates.

So far, five firms with a combined market value of £1.1 billion have cancelled proposed flotations or initial public offerings (IPOS) in London. That compares to last year, when seven withdrew flotations that would have been raised £754 million.

The biggest pulled IPO in UK markets this year is insurer Reassure.the zombie funds group, which buys and consolidates old, unwanted life insurance books, wanted to raise £818 million from its IPO, which would have valued it at £3 billion.

However, its owners Swiss Re and MS&AD scrapped the deal as sceptical investors were unwilling to meet their valuation of the business.

Reassure is one of the largest failed IPOS of the past five years. The only failed deals larger were logistics group Logicor, which was supposed to raise £2 billion, and telecoms infrastructure company Arqiva, which had wanted to raise £1.billion from its flotation.

However, that pales in comparison to the collapse of the Wework flotation in the US.

Initially valued at £38.1billion, the serviced office group met with such a hostile reaction from potential investors that it dropped its flotation value to £8billion, before conceding defeat and withdrawing its IPO plans.

Investors had attacked Wework for its poor corporate governance, the lack of detailed financial information that it had made available, widening losses, and the influence of its founder Adam Neumann.