Hands is hit as Deutsche Annington shelves sale

 
David Hellier
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THE SALE of shares in Deutsche Annington, a German landlord majority-owned by Guy Hands’ private equity group Terra Firma, was shelved last night.

The firm said in a statement that “persistent adverse market conditions” had prompted the decision to postpone its initial public offering, but chief executive Rolf Buch said the company’s overall strategy remained strong.

Terra Firma had originally been planning to sell 27m shares.

Advisers had already decided a little after lunch-time yesterday, hours before the deal closed, to cut the size of the Frankfurt share offer from €900m (£772m) to €650m, just before the official close for the deal.

Banks managing the sale, led by JP Morgan, Morgan Stanley and STJ Advisors, sent a message to investors saying the issue was 80 per cent subscribed, not sufficient to guarantee the issue would definitely proceed.

The banks cut the size of the deal but did not lower the price range and some investors pulled orders as they sensed the whole issue was in doubt.

Bankers on the deal said it had been hit by uncertain markets and by one of the banks pulling a large private order for stock at a late stage.

But there was also some poor sentiment related to the float of another German property group earlier this year. The Goldman Sachs majority-owned LEG floated in February at €44 a share but is now priced at €40.

Deutsche Annington, the second German real estate company to aim for a listing this year, has been attempting to attract investors as market indices are paring their gains in anticipation of the US Federal Reserve cutting back on its bond buying programme.

Two weeks ago, an Africa-based energy group, Caracel Energy, was forced to abandon its plans to raise money in an IPO.