THE already shaky climate in the London new issues market worsened yesterday as the Russian mobile phone retailer Euroset pulled its £800m issue.
While the deal was overshadowed by Glencore’s announcement, Euroset’s flotation is the latest smaller planned initial public offering (IPO) to have been dogged by uncertainty because of nervousness in the markets. Investors are increasingly unwilling to pay for what they deem to be overvalued stock.
The decision to pull the float was taken around lunchtime, according to bankers close to the deal.
Three issues have been pulled from the London market in the past couple of weeks: Topaz Energy, which wanted to raise £300m; on Tuesday the online payments group Skrill pulled its £80m cash-raising; and the vacuum technology group Edwards last week pulled its £375m offer.
There were also three Russian floats pulled from the market earlier this year. Market experts are talking about a “buyers’ strike” in the London markets, which are suffering far more than their European counterparts. Experts say that the expectations of sellers are currently higher than they ought to be given the scepticism of potential buyers. Potential investors, they say, have also been spooked by sharp price declines in two deals that priced at the end of last week, Perform and Austrian group AMAG.
The Euroset deal was expected to net Russian billionaire Alexander Mamut more than £500m. Mamut is a shareholder in the troubled retail group HMV and he is also expected to subscribe for shares in Nomos Bank, a Russian IPO set to price within the next few days.
Euroset said in a statement that “the shareholders and management team remain confident of the strong fundamentals for Euroset and will continue to develop the business in line with the existing strategy.”
Alfa Capital, Credit Suisse, Goldman Sachs and VTB Capital were the bank advisers on the deal.
Banking sources were saying even as recently as Wednesday that the deal would push ahead, although very likely on a reduced scale.
Etalon, a Russian property group, is expected to price shortly.