Uncertainty prevails in IPO market

The delay in the listing of Swedish firm Alfa Laval is the latest in a series of difficulties to beset the IPO market in Europe.

Alfa Laval, the Swedish heating equipment manufacturer controlled by Industri Kapital, has put back its listing on the Stockholm bourse whilst simultaneously announcing a price reduction and a lower share offer following lower-than-expected take-up of the original share offer. 

The offer is now scheduled to take place on Friday rather than today as had been planned and will consist of 23.7m shares – nearly 40 per cent less than the original offer. Alfa Laval has also cut its price range to between Skr90 to Skr95 (E9.75-E10.25), from the original range of Skr108 to Skr140.

The delay will cause concern among private equity firms, who for the first time in 18 months had started to see the IPO market as a viable exit strategy. Last week, Doughty Hanson-backed LM Glasfiber was forced to indefinitely postpone its E500m listing in Denmark, again citing ‘adverse market conditions’. 

HMV, the music retailer controlled by EMI and Advent, completed its £772m listing on the Official List on May 10, although the valuation, at 192p was at the lower end of the 190p – 200p price range and the company’s share price has since fallen to 176p.

However, uncertainty in the IPO market has not had any discernible effect on the optimism of private equity firms CVC and Cinven, who this week announced that the listing of William Hill would proceed in June as planned.

Schroder Salomon Smith Barney (SSSB) is global co-ordinator and sponsor of the William Hill offering. Deutsche Bank is joint bookrunner on the IPO, which could value the betting firm at £1bn. Cinven and CVC will between them retain at least 30 per cent in total and may retain as much as 50 per cent, dependent on how the listing is received by the markets. The two firms paid Nomura £825m for William Hill in 1999.