British bank Aldermore has cancelled its London initial public offering (IPO), blaming tough market conditions for joining a slew of European firms to pull their listings in recent weeks.
“Due to recent deterioration of global equity markets, Aldermore’s board and shareholders have elected not to proceed at this time with the IPO of Aldermore,” Aldermore said.
The so-called “challenger bank”, founded in 2009 by former Barclays executive Philip Monks with backing from private equity firms AnaCap and Morgan Stanley Alternative Investment Partners, had planned to sell about £300m ($478m) of shares by Thursday and list the following day with a market value of about £800m.
“The bank was being sold on growth at a time that we’re seeing a flight to safety. It was the wrong stock at the wrong time,” said a person close to the deal.
The source added that books “didn’t get close” to being covered, and the valuation was regarded by some investors as too high.
French energy services firm Spie and Italian cosmetics company Intercos are among several European companies to have dropped their IPOs in recent weeks amid market jitters. The FTSE 100 has lost over eight per cent since September 4.
“We have a big issue here. You already had rumblings from investors earlier this year. The problem is the hedge funds have backed away from the market in quite a big way,” an equity capital markets banker said.
“There’s been all this pageantry from IPOs this year and yet they haven’t made money.”
The failure of Aldermore casts a shadow over the prospects of the bigger and more widely known Virgin Money, another bank seeking to list this month. It will sell £150m of new shares and is expected to be valued at £1.5bn to £2bn.