Two firms pull London listings, citing ‘market volatility’

Two companies – ready-meal maker Bakkavor, and Arqiva, a TV, radio and mobile phone mast firm – announced on Friday that planned London listings would not go ahead.

Despite saying it had received ‘sufficient institutional demand to cover the offering’, Bakkavor said ‘current volatility in the IPO market’ meant a listing now would not be in the best interests of the company or its shareholders. 

Arqiva said ‘pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders’, adding that it will revisit the listing once conditions improve.

Bakkavor, which supplies foods such as pizza and ready meals to UK grocers including Sainsbury’s, Waitrose, Tesco and M&S, was due to price its shares Friday morning and had been expected to raise around £1.5 bn ($2 bn). Arqiva had been expected to float sometime this month, valued at around £4.5 bn.  

Although both companies cited unfavorable market conditions for listing, the announcements come at a time of high activity on the London Stock Exchange, with London the third-busiest IPO destination in Q3 – after Hong Kong and Nasdaq – according to EY.

But this heavy activity over the quarter has resulted in ‘IPO fatigue,’ Bella Brandon, strategist at brokerage Olivetree Financial, tells the Financial Times. Adding that investors were ‘quite interested’ in Arqiva and Bakkavor, she says ‘so much has come to market’ that ‘capital markets desks are hurting’.

The FT also notes that investors are keeping some money aside to ‘pre-position’ for big upcoming deals, ‘such as the French government’s planned sale of close to 5 percent of Renault for €1.2 bn ($1.4 bn).’