Terra Firma abandons Deutsche Annington IPO

The postponement of the IPO, which had originally been expected to generate proceeds of €1.2bn, is a setback for Terra Firma as it looks to return cash to investors ahead of a return to the fundraising market next year.

Terra Firma Capital Partners has postponed plans to float German property group Deutsche Annington.  

The Guy Hands-led firm has delayed the IPO because of “persistent adverse market conditions”, Deutsche Annington said in a statement. 

The listing of shares on the Frankfurt Stock Exchange was originally planned for 3 July 2013. “The company along with the shareholder will continue to evaluate the market environment regarding an IPO in the future,” the statement said. 

The business had originally hoped to raise about €1.1 billion from the flotation, at a valuation of around €11 billion. It had already reduced that target to about €650 million – including €400 million from the issuance of new shares – but has now decided to pull the offering altogether after failing to attract sufficient interest. 

The postponement is a setback for Terra Firma, which is seeking to return money to investors ahead of a possible fundraising push next year.

However, the firm still has other potential exits in the pipeline: it is understood to be planning to sell UK cinema chain Odeon, British wind farm operator Infinis, and Irish gas utility Phoenix before it comes to market with a new vehicle.

Terra Firma has not raised a fund since losing control of music publisher EMI in 2011.

Guy Hands originally acquired Deutsche Annington in 2001, when he was still in charge of European leveraged buyouts at Japanese bank Nomura. A year later, he spun out of Nomura to found Terra Firma. In 2005, the latter bought Viterra, the real estate division of German utility Eon, and merged its portfolio with that of Deutsche Annington.

Deutsche Annington currently owns 180,000 German properties. It posted an EBITDA of €474 million last year.