LONDON Waste management specialist Biffa (BIFF.L) priced its initial public offering (IPO) at a lower than expected level on Monday, highlighting continuing difficulties faced by companies seeking to raise cash on European capital markets.
Biffa priced its London listing at 180 pence per share, giving a market capitalisation of 450 million pounds. It had previously been expected to list at between 220 pence and 270 pence per share, according to Thomson Reuters International Financing Review.
The period before November's U.S. presidential election had been expected by bankers to offer a window for a series of IPOs, but market volatility and subdued investor demand have proved disruptive despite stock indexes being close to record highs.
British auto parts company TI Fluid Systems [IPO-TIFU.L], energy supplier First Utility, gym operator Pure Gym and German real estate company OfficeFirst, which found investors were not willing to stump up the asking price, have all cancelled or postponed IPO plans in recent weeks.
Software company Misys said last week that it planned to raise 500 million pounds by listing at least 25 percent of its shares on the London Stock Exchange, though a source close to the deal told Reuters on Sunday that it was expected to reduce the size to about 20 percent because of weak investor demand.
Those who have braved the markets, such as green energy business Innogy IGY.DE and payment services provider Nets (NETS.CO), had lacklustre debuts.
However, there was one bright spot for smaller companies when Luceco (LUCEL.L), a manufacturer and distributor of LED lighting and wiring products, priced its London IPO at 130 pence per share, raising gross proceeds of 26 million pounds.
Biffa, which was forced into an emergency financial restructuring after the 2008/09 financial crash, said it would receive 262 million pounds in IPO proceeds, which will largely be used to reduce debt. It said it is issuing about 47.2 percent of its share capital.
Citigroup and JP Morgan are joint global coordinators for the IPO and are joined by HSBC as joint bookrunners.
(Reporting by Noor Zainab Hussain in Bengaluru and Dasha Afanasieva in London; Editing by Sunil Nair and David Goodman)