Cabot Credit Management ditches £1bn float citing poor market conditions

Helen Cahill
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Several floats have been cancelled this month (Source: Getty)

Cabot Credit Management, Britain’s biggest debt collector, abandoned plans to float yesterday, one in a series of ditched IPOs in recent months.

In a statement, Cabot said that current conditions in the IPO market meant it would not be following through on the £1bn float.

“The high level of engagement and interest that we received from a wide array of investors was very encouraging, but the timing has been unfortunate with respect to IPO conditions,” said Ken Stannard, Cabot’s chief executive.

Read more: Bakking up: Supermarket supplier Bakkavor sacks off London float

Cabot, which buys overdue credit card debt and other unsecured debt from lenders, will reassess the possibility of a float when conditions improve.

TV transmitter firm Arqiva scrapped a £6bn float at the beginning of the month, citing market uncertainty. The IPO would have been the biggest this year.

On the same day, food supplier Bakkavor said it was ditching its £2bn float due to volatility.

Russ Mould, investment director at AJ Bell, said the advisers on the deal will be disappointed, but that “few tears should be shed by investors”.

“First, the deal’s failure to fly means that fund managers are being selective when it comes to new deals and making active decisions to protect their clients’ cash,” he said. “Second, rampant float activity is normally a sign of an imminent market top.”

Read more: Arqiva scraps £6bn float amid market uncertainty

However, he added that it was difficult to see why it was a bad time to float, given that global sentiment is generally good.

There are many IPOs rumoured to be coming to the market, including Tesco Bank, Compare the Market, and O2. And, Danny Cox at Hargreaves Lansdown said that it should be a good time for IPOs.

“However we are in a strange bull market where investor confidence is not far off its knees, but markets continue to push highs,” he said.

“Putting together an IPO is an expensive business and made even more expensive if it doesn’t go ahead, so it’s understandable that nervousness around Brexit and valuations are taking their toll.”

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