IPOh dear: Another blow for London's flotation market as Misys pulls listing plans

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Misys announced its intention to float in early October after months of speculation (Source: Getty)

Misys has become the latest company to abandon plans for an initial public offering (IPO), in another blow for London’s flotation market.

The tech giant, which was expected to launch one of the biggest floats of the year in the coming weeks, said in a statement that it had received “encouraging institutional support”, but “decided not to proceed... at the current time due to market conditions”.

Read more: UK flotation market sinks to four-year low amid Brexit uncertainty

Misys, which had already cut the price of its IPO, follows the likes of Pure Gym, TI Fluid Systems and Mountain Warehouse in abandoning flotation plans this month.

Vista Equity Partners, which took the company private in 2012 in a £1.3bn acquisition, announced its intention to float Misys in early October.

Read more: Misys: London's biggest IPO of the year is on

It was thought that the IPO would value the company at £5.5bn, but Misys was forced to cut the value of its float in mid-October.

Yesterday, medical products firm Convatec said it would float on the London Stock Exchange next Monday, while Biffa joined the market after cutting its base price earlier this month.

Commenting on the latest pulled IPO, Aberdeen Asset Management head of primary funds William Gilmore said: 

This is just the latest in a long line of IPOs which have been pulled. There’s a suspicion that some private equity sponsors are using Brexit as a bit of an excuse for pulling IPOs that were already looking a bit shaky. Fund managers are often reluctant to invest in companies that have been taken private and then relisted. Many have had their fingers burnt and it’s hard to see why an IPO would have been the optimal route for the sponsor anyway in this case.

The IPO market is open to private equity backed companies but it’s challenging. There’s real pressure on pricing, valuations are very high and investors can afford to be picky. We’d rather see keenly priced deals than IPOs being pulled though.

Tags: IPOs