Blow for London as We Soda cancels float

Britain’s stock market suffered a fresh blow yesterday after what would have been this year’s first blockbuster float was called off – blaming an ‘extremely cautious’ investor climate.

WE Soda, a chemicals producer owned by the Turkish billionaire Ciner family, scrapped its UK listing plan a fortnight after announcing its intention to go public.

The withdrawal crushes any hope that the listing would set off a chain of IPOs to reawaken the slumbering London market.

And the news comes as fresh worries about inflation and interest rates prey on investor sentiment.

WE Soda’s initial decision was a desperately needed shot in the arm for the City after a slew of companies have snubbed Britain in favour of private equity ownership or floating in New York. 

Float sunk: WE Soda, a chemicals producer owned by the Turkish billionaire Ciner family, scrapped its UK listing plan a fortnight after announcing its intention to go public

But last night, chief executive Alasdair Warren said: ‘Since our intention to float announcement some weeks ago, we had been encouraged by the breadth of investor engagement globally and the subsequent interest from prospective investors in our IPO.

‘Despite this, the reality is that investors, particularly in the UK, remain extremely cautious about the IPO market and this extreme investor caution in London meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics.

‘As a result, we have decided to cancel our IPO on the London Stock Exchange.’

Investors have been deterred by gilt yields surging to 15-year highs, as it is expected the Bank of England will hike interest rates even more.

WE Soda’s headquarters are in London but it operates in Turkey and Wyoming, in the US, where it produces natural soda ash, used in glass manufacturing, detergents and soaps, plus batteries for electric vehicles.

The Ciner family own an industrial and media empire under WE Soda parent company Ciner Group, headed by billionaire 67-year-old Turgay Ciner, who owns a home in London.

Its float would have been the UK’s biggest since GSK’s demerger of its consumer health arm Haleon last July.

WE Soda was eyeing a valuation of up to £7billion and would have been able to enter the FTSE 100 index. 

Susannah Streeter, the head of money and markets at Hargreaves Lansdown, said: ‘This is fresh blow for London, just as confidence in the city as an IPO launchpad appeared to be edging back upwards.

‘Investors are understandably cautious given the nervousness surrounding the UK’s prospects, with inflation still running so hot.’

It comes after Cambridge chipmaker Arm opted for a multi-billion-pound float in New York while building materials giant CRH said it would switch its listing from the UK to the US.

Ministers, regulators and leading City figures are pushing ahead with reforms designed to restore London’s status as a global financial centre.

This post first appeared on Dailymail.co.uk