London IPO market set for £30bn boost, with Logicor, O2, Misys, TI Fluid Systems, BGL Group and Kuwait Energy weighing up flotations
London is set to benefit from up to £30bn of flotations in the coming months, with Logicor, O2, and Misys among a number of high-profile companies weighing up initial public offerings (IPOs) in the capital.
After a rocky end to 2016, when several deals were pulled due to market uncertainty, 2017 saw a subdued start. But at least six companies, worth an estimated £30bn-plus combined, are at various stages of preparing stock market floats in London this year.
City PM understands car parts maker TI Fluid Systems, owned by Bain Capital and with an estimated value of more than £2.5bn, is one company considering reigniting its float plans after a climbdown last October.
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Logicor, an £11bn-valued warehouse company owned by private equity giant Blackstone, last week appointed bankers from Goldman Sachs, Bank of America Merrill Lynch, Citi and Morgan Stanley to oversee a London float, which is likely to come in the second half of the year. Blackstone, however, is still considering selling the company as part of a dual-track process.
UK mobile phone giant O2 was one of the companies to let down the market last year. After its failed bid to merge with Three, owner Telefonica was seeking to float the £10bn company in late 2016. Amid market uncertainty, the plans were pushed back and an IPO is anticipated this year.
Tech giant Misys withdrew its IPO plans in October last year. Owner Vista Equity Partners remains keen to exit the company, which has been valued at between £4.5bn and £5.5bn, and is currently weighing up whether to retry the London float. An IPO on Nasdaq in New York is also being considered, as is a sale.
Elsewhere, Comparethemarket.com owner BGL Group, which is valued at up to £2bn, is lining up a float for the second half of this year. And Kuwait Energy is believed to have appointed bankers as it seeks a value of $1bn (£820m) through a London float.
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Commenting on the general IPO market in the UK, Mark Austin, a capital markets partner at Freshfields, said: “There is a healthy pipeline of deals. The question is when and where they’ll list.”
Scott McCubbin, IPO leader at EY, said it had been an “exceptionally quiet” start to the year, but added: “There are some decent size companies looking to float, we do see them in the pipeline.”
Kate Ball-Dodd, a partner at Mayer Brown, added: “There are many reasons why the London IPO market remains particularly attractive, despite news of many companies abandoning plans to float due to the current uncertainty of the political environment.”
The most hotly-anticipated flotation for 2018 is that of oil behemoth Saudi Aramco, which is considering both London and New York for its listing.