The health of the London Stock Exchange is often measured in new listings, and such is the slowdown that a single company can be both a sign of its resurgence and its weak health in the same month.
WE Soda, a soda ash company from Turkey, confirmed its intention to list just last week, but now says "extremely cautious" investors won't support its valuation hopes and has cancelled the float. Chief executive Alasdair Warren said it was the market conditions that brought on a change of heart.
"The reality is that investors, particularly in the UK, remain extremely cautious about the IPO market and this meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics," he said.
Warren, a former banker, was to lead the listing alongside chair Didem Ciner, the wife of the company's owner Turgay Ciner. Warren told the Financial Times this week the company had held 300 investor meetings in relation to the float.
The company is the world's biggest miner of soda ash, which is used in glassmaking, as well as the food and chemicals industries.
Just 10-15 per cent of WE Soda was to be listed, with the rest remaining in the hands of the Turkish Ciner Group conglomerate. The market capitalisation of the company had been estimated as high as £6.5bn, which would have put WE Soda in the FTSE 100. Cash raised from the sale of the stake would have been used to pay off intercompany loans.
Hargreaves Lansdown analyst Susannah Streeter called the decision a "blow for London markets". The disappointment comes after hopes the listing would encourage others to come to London after IPO numbers petered out in the past year.
When the IPO was announced, Streeter had said a successful listing would not have fixed the listing woes, however. "Although this is a much-needed drop in a parched landscape, it’s still unlikely to lead to a flood of immediate listings due to the still volatile nature of market sentiment," she said.
