Equiniti, the share registrar company that handles dividend payments for most FTSE 100 companies, has attracted enough interest to support its imminent £500m-£600m flotation, despite growing investor indifference to all but the larger share issues.
The company’s advisers will price the new shares on Tuesday. Bankers expect thiem to be at the lower end of the 165p-200p price range.
A source close to the process said: “Sentiment towards the sector has definitely weakened since the group first started thinking of floating some months ago. Another banker said that hedge-fund involvement in new share issues had all but dried up, further weakening demand.
Equiniti’s management team was in the US and Europe during last week marketing the deal. The company, formerly owned by Lloyds TSB, is expecting to raise around £300m in a deal that will value it at between £495m and £600m.
Earlier this month, two European new issues were pulled – Xella in Germany and Shield Therapeutics in the UK – increasing nervousness for private companies trying to go public by issuing new shares and listing them.
Retirement homebuilder McCarthy & Stone is trying to interest investors in a flotation that should value the group at nearly £1bn. The IT group Softcat has also announced plans to for a flotation that will value it at around £500m.
In recent weeks the larger, capitalised Worldpay pulled off a float, while the car insurance group, Hastings, had to launch its IPO at a price beneath its range.
London’s share of European fundraising has fallen this year, with 26% of the money raised through flotations in 2015 so far coming from floats in the UK capital compared to 39% last year. Spain, Germany and Italy have all increased their share.
