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| UK firms pull multibillion-pound floats in latest sign of stock market jitters | UK firms pull multibillion-pound floats in latest sign of stock market jitters |
| (about 1 month later) | |
| TV and mobile mast owner Arqiva and Bakkavör, one of the biggest providers of ready meals to British supermarkets, have both pulled plans to float on the London stock exchange citing concerns over the volatility of the market. | TV and mobile mast owner Arqiva and Bakkavör, one of the biggest providers of ready meals to British supermarkets, have both pulled plans to float on the London stock exchange citing concerns over the volatility of the market. |
| Arqiva – which just last week announced plans for a £6bn flotation, in what would have been the UK’s largest stock market listing so far this year – said it intended to “postpone” its initial public offering until UK market conditions improve. | Arqiva – which just last week announced plans for a £6bn flotation, in what would have been the UK’s largest stock market listing so far this year – said it intended to “postpone” its initial public offering until UK market conditions improve. |
| “The board and shareholders have decided that pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders, and will revisit the listing once IPO market conditions improve,” said Arqiva, which carried the BBC’s first TV broadcast in 1936 and is an investor in the YouView TV platform. | “The board and shareholders have decided that pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders, and will revisit the listing once IPO market conditions improve,” said Arqiva, which carried the BBC’s first TV broadcast in 1936 and is an investor in the YouView TV platform. |
| There comes a time in the life of a private company when its original owners want to expand the business, raise funds for acquisitions or simply cash in some of their investment. | There comes a time in the life of a private company when its original owners want to expand the business, raise funds for acquisitions or simply cash in some of their investment. |
| One route for doing this is through an initial public offering (IPO), which essentially means moving from being a private business with few shareholders to a public company quoted on a stock exchange. | One route for doing this is through an initial public offering (IPO), which essentially means moving from being a private business with few shareholders to a public company quoted on a stock exchange. |
| A prospectus is issued and new shares offered, typically, to financial institutions in the first instance and then, if there is enough demand and the necessary regulatory hurdles have been overcome, the company is listed on the stock exchange. As a public company, any investor can now buy its shares on the open market. | A prospectus is issued and new shares offered, typically, to financial institutions in the first instance and then, if there is enough demand and the necessary regulatory hurdles have been overcome, the company is listed on the stock exchange. As a public company, any investor can now buy its shares on the open market. |
| There are some disadvantages for the company. It faces more scrutiny and regulatory demands in the public eye, it could prove a target for a predator via a takeover bid and, if its performance is not up to scratch, its shares can plunge in value. | There are some disadvantages for the company. It faces more scrutiny and regulatory demands in the public eye, it could prove a target for a predator via a takeover bid and, if its performance is not up to scratch, its shares can plunge in value. |
| Bakkavör, which provides fresh prepared food from salad and pizza to stir fries as own-brand products to clients including Tesco, Marks & Spencer, Sainsbury’s and Waitrose, announced plans for a £1.7bn flotation last month. | Bakkavör, which provides fresh prepared food from salad and pizza to stir fries as own-brand products to clients including Tesco, Marks & Spencer, Sainsbury’s and Waitrose, announced plans for a £1.7bn flotation last month. |
| The company, the UK’s biggest supplier of hummus, had been expected to put a price on its shares on Friday morning. | The company, the UK’s biggest supplier of hummus, had been expected to put a price on its shares on Friday morning. |
| “Whilst the company received sufficient institutional demand to cover the offering, the board has taken the decision that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market,” the company said. | “Whilst the company received sufficient institutional demand to cover the offering, the board has taken the decision that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market,” the company said. |
| “Bakkavör will continue to pursue its proven strategy within the fast-growing fresh prepared food sector. The business continues to trade well and against this backdrop, the board remains confident in the outlook for the group.” | “Bakkavör will continue to pursue its proven strategy within the fast-growing fresh prepared food sector. The business continues to trade well and against this backdrop, the board remains confident in the outlook for the group.” |
| In April, the company was at the centre of the UK “hummus crisis” after the mass withdrawal of the product from British supermarket shelves after customers complained of a metallic taste. | In April, the company was at the centre of the UK “hummus crisis” after the mass withdrawal of the product from British supermarket shelves after customers complained of a metallic taste. |
| The pulling of the flotation plans raise fresh fears about London’s status as a top destination for initial public offerings, the pace of which has slowed following the UK’s vote to leave the European Union. | The pulling of the flotation plans raise fresh fears about London’s status as a top destination for initial public offerings, the pace of which has slowed following the UK’s vote to leave the European Union. |
| Last month, TMF Group, the Dutch business outsourcer, abandoned plans for a £1bn float in London and move its headquarters to the UK in favour of going private in a €1.75bn (£1.55bn) deal with private equity firm CVC. | Last month, TMF Group, the Dutch business outsourcer, abandoned plans for a £1bn float in London and move its headquarters to the UK in favour of going private in a €1.75bn (£1.55bn) deal with private equity firm CVC. |
| The firm had positioned its proposed listing in London as a “vote of confidence for the UK”. | The firm had positioned its proposed listing in London as a “vote of confidence for the UK”. |
| Russian oligarch Oleg Deripaska’s energy business En+ has priced its forthcoming flotation at the bottom of the price range it had announced. | Russian oligarch Oleg Deripaska’s energy business En+ has priced its forthcoming flotation at the bottom of the price range it had announced. |
| TI Fluid Systems, the car parts maker, floated for £1.5bn last week, having previously pulled plans following the Brexit vote. | TI Fluid Systems, the car parts maker, floated for £1.5bn last week, having previously pulled plans following the Brexit vote. |
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