Firms hit as City turns off the tap

 
David Hellier
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London’s IPO market, in which companies raise funds through the issue of new shares, was in a state of intensive care last night after the online payments group Skrill became the latest issuer to pull its listing plans.

The UK online payments provider postponed its London offering, blaming “adverse IPO (Initial Public Offering) market conditions”.

It had earlier cut the size of its share offer, in a last-minute and doomed scramble to salvage the listing.

Existing investors in Skrill, operator of online payments system Moneybookers.com, cut the offer to £30m of shares in the float, down from £80m. Yet frenzied talks all day to save the sale were in vain, after management resolved to put the plans on hold after an eleventh hour meeting last night.

Skrill’s failed battle to persuade investors to back it comes days after Edwards, the vacuum technology firm, was forced to pull its share offer. Last week the media group Perform became the first UK-based company to press ahead with a flotation in the whole of 2011 to date, according to International Financing Review (which tracks transactions of more than £50m). But its shares have dived by around 20 per cent since the deal went ahead last Thursday.

One equity markets banker said last night: “I’ve been speaking to a lot of investors but basically the trust with them has been broken. They just think we are trying to get them.” He cited the flotations of Promethean, Betfair and Perform as examples of companies that had seen falls in their share price soon after their floats. He also said the problems currently being experienced by identity security group CPP, whose shares have dived in the past few days on regulatory issues around a year after its flotation, had not helped.

Skrill, led by chief executive Martin Ott (pictured) has more than 15m registered users and mainly operates in Europe. It had attempted to stage an IPO market offer to boost its profile and help fund its expansion into new products and locations.

The firm is majority owned by private equity group Investcorp Technology Partners, who were due to be among those selling shares.