Arqiva and Bakkavor pull IPO plans blaming market volatility

(qlmbusinessnews.com via telegraph.co.uk – – Fri, 3 Nov, 2017) London, Uk – –

Mobile mast provider Arqiva and food producer Bakkavor have both pulled their initial public offerings on the London Stock Exchange, blaming “volatility” in the market.

Arqiva’s potential £6bn float, which would have been London’s biggest IPO of the year, was announced just two weeks ago.

Bakkavor, which supplies ready meals to a host of high-street retailers, revealed plans for a £1bn float last month.

In a brief statement this morning Arqiva said: “The board and shareholders have decided that pursuing a listing in this period of IPO market uncertainty is not in the interests of the company and its stakeholders, and will revisit the listing once IPO market conditions improve.”

Bakkavor said that while it has received enough interest from investors, it had decided “that proceeding with the transaction would not be in the best interests of the company, or its shareholders, given the current volatility in the IPO market”.

Arqiva has a monopoly on television and radio broadcast masts, and is Britain’s biggest independent provider of infrastructure for mobile operators, who are expected to need more and more masts as demand for data rockets.

The Telegraph reported earlier this year that Arqiva – currently owned by Macquarie and the Canada Pension Plan Investment Board (CPPIB) – was being eyed by at least half a dozen buyers.

However when this process resulted in just one offer, the company decided to opt for an IPO instead.

Despite the shift to on-demand viewing over the internet, Arqiva has reported growth in its broadcast unit because its digital terrestrial television signals are used by hybrid services such as BT TV, which combines internet-based pay-TV with Freeview. However some analysts had suggested it might struggle to convince investors that there is a long-term future in broadcast TV.

Bakkavor, owned by its Icelandic founders Agust and Lydur Gudmundsson and US hedge fund Baupost, had intended to raise £100m to pay down debt.

The Gudmundsson siblings had borrowed to fund Bakkavor’s expansion and came unstuck when the financial crisis hit Iceland’s banking system in 2008. They were forced into a debt-for-equity swap in 2010 that shrank their stake in the firm, only to team up with Baupost last year to take back control

The London IPO market appeared to getting into its stride after a lacklustre 2016 and an underwhelming start to the year. In recent months TI Fluid Systems, and Russian power producer and metals company En+ have unveiled large London IPOs.

However Dutch business outsourcer TMF announced a £1bn float and then cancelled it last month, opting instead to sell itself to private equity firm CVC.

By Jon Yeomans