Europe’s initial public offering (IPO) market is showing signs of fatigue, forcing companies to cancel their listing plans or scale back the size of their fundraising, the Financial Times reported Thursday.
Retailer Fat Face scrapped its IPO and British insurance group Saga priced its flotation at the low end of the range amid lukewarm investor interest.
In a further sign of waning appetite for private equity-backed flotations, Apax Partners is leaning toward selling Travelex, the British foreign exchange company, rather than proceed with a planned £1bn (US$1.69 billion) IPO, the report said. The buyout house is in talks with a Middle East investor about a bid.
Investors are becoming more demanding after months of easy money on Europe’s strongest IPO market in seven years, the report said, citing a senior banker.
Meanwhile, United States investors who helped fuel the IPO boom by investing in European shares last year as the region’s economy began to pick up, are allocating less new money to the region’s equities.
Alasdair Warren, head of European financial sponsors group at Goldman Sachs, estimates that the inflows of US cash being invested in European equities have shrunk from about US$10 billion a month last year to about US$1 billion in the last month.
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