Is London’s flotation market faltering, or is there cause for optimism after an EU referendum hiatus on activity? There have been mixed signals coming from the City this week.
Here are some of the big stories from the initial public offering (IPO) market currently:
TI Fluid Systems: OFF
The Bain Capital-owned auto supplier this morning confirmed it had scrapped its planned flotation.
This waste disposal company also appears to have run into trouble, with the owners considering cutting the value of its initial public offering (IPO) in a bid to keep it alive.
It emerged yesterday that the LED lighting and portable power manufacturer, invested in by Epic Private Equity, wants to raise £25m in a float which could come as early as next Monday.
The tech giant is aiming to float at the beginning of next month, in what would be one of the biggest IPOs of the year.
Esure this week confirmed that its planned spin off of Gocompare.com is set to go ahead, with the comparison website expected to float on 3 November.
Pure Gym: OFF
The gym group pulled its IPO on Tuesday, citing "challenging" market conditions.
The medical products maker wants to raise $1.8bn in a listing in late October or early November.
O2: BEING CONSIDERED
What the experts say
Lucy Tarleton, PwC’s director of capital markets in the UK, linked this week’s IPO struggles to Theresa May’s comments at the Conservative party conference last week and her “hard Brexit” pledge.
“Both of these companies [Pure Gym and TI Fluid Systems] have cited market conditions. I think it will be interesting what happens with the others that are still out there,” she told City A.M.
These IPOs were probably trying to get away before the US elections on 8 November, which is probably the next hurdle… But I think if companies don’t manage to get deals done before 8 November, then we’re probably not going to see much before the first quarter of next year.
Scott McCubbin, partner and IPO leader at EY, played down the significance of the US election and expressed hope for the future of the market.
The markets will eventually stabilise again,” he said. “And when they stabilise again we think there is still [interest] around IPO activity.
We’re not seeing people saying ‘we can never do this’. I think anybody who was going to float in the next couple of weeks was finding it a turbulent time to do so. So people may have pulled their plans for the moment, but that’s not to say they have pulled them indefinitely.