Soda ash firm WE Soda has ditched its plans to float on the London Stock Exchange today citing “extreme investor caution”, just one week after first announcing the move.
The Turkish owned firm had delivered a boost to London’s beleaguered exchange when it revealed last week it was plotting a London IPO in what would have been the biggest float this year. However, boss Alasdair Warren said today it had ditched the plans.
“Investors, particularly in the UK, remain extremely cautious about the IPO market and this extreme investor caution in London meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics,” he said.
The firm’s announcement last week was hailed as a potential end to the market drought in the capital after a torrid start to the year. Cash raised via IPOs on London’s markets tumbled by over 80 per cent in the first quarter.
Analysts said the withdrawal from WE Soda would be renew fears over London’s appeal for listings.
“This is fresh blow for London just as confidence in the city as an IPO launch pad appeared to be edging back upwards,” said Susannah Streeter, head of money and markets, Hargreaves Lansdown. “Investors are understandably cautious given the nervousness surrounding the UK’s prospects with inflation is still running so hot.”
She added that the uncertainty shaking the UK economy is “clearly off-putting” and firms considering IPOs may continue to “set their sights on New York instead.”
London Stock Exchange officials and regulators have been scrambling to revive the appeal of London after the bourse was dealt a series of high-profile snubs, including the move from British chipmaker Arm to float in New York.
The Financial Conduct Authority announced a package of reforms earlier this year to boost the appeal of London, while top City figures have been looking to overhaul the “cultural attitude” of the Square Mile.