Comment

2003 Issues

Summer 2010

The recovery in IPO activity that emerged in the spring this year has continued into the summers although it is fair to say that sentiment remains extremely fragile.

Back in March there was the extremely successful LSE main market offer of shares in the fast growing fashion retailer Supergroup. Their shares listed on 24th March 2010 and rapidly rose above the offer price of 500p and by August 2010 were trading at over 900p, a rise of more than 90%.

Much less successful was the much hyped flotation of the Waitrose linked online grocery operation of Ocado. Although Ocado has built up a strong retail reputation during the 8 years it has been trading it has yet to report a profit and both analysts and media commentators viewed the flagged offer price of between 200p and 220p was much too high. At the last minute the company ad its advisers reduced the sale price to 180p. Despite this reduction the shares opened at a discount of almost 20p and by early August were still trading at a 15p discount to the placing price.

A number of other large companies that had been planning a listing on the LSE main market, such as Merlin Entertainments, New Look and Betfair, have cancelled or deferred action until conditions improve.

Activity on the AIM market has been more intense although a lot of the action has been from existing listed investment vehicles reversing into their chosen acquisition targets.

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New Issues Centre
Summer 2010