EU Market Volatility Sidelines IPOs

Initial Public Offering

Even while the U.S. is seeing a resurgence of sorts in initial public offerings, Europe may be seeing a bit of a slide. Reuters reported on Tuesday (Oct. 11) that two European companies have scuttled their intentions to come public, citing the oft-repeated refrain (by other firms) that market conditions remain unfavorable. The newswire noted that many other companies that came public found tough sledding once they were indeed listed.

The two firms — U.K. gym operator Pure Gym and Germany-based real estate firm OfficeFirst — shelved plans this week. The withdrawals are a “setback for bankers who had hoped a market window was finally looming” after deals had been pushed back on macro-concerns, including those centered on China and Brexit.

OfficeFirst said last month that it would sell shares worth up to €880 million. The asking price of €21–€23 was not getting as much excitement from investors as might have been seen otherwise, said CEO Michiel Jaski to the newswire. That follows a bowing out of a pending public listing from U.K. energy supplier First Utility, on the heels of continued Brexit uncertainty.

Overall, reported Reuters, IPOs slumped by more than a third, as measured by total value, to $79 billion through the first three quarters of 2016, and that is a nadir not seen since 2009.


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