CMC Markets indefinitely postpones planned £800m flotation |
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Thu, 25 May 2006 11:35
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LONDON - CMC Markets, the financial trading firm is all set to postpone its planned £800m flotation on the London Stock Exchange due to the uncertainty prevailing in the markets. CMC founder and executive chairman Peter Cruddas said that the firm has had a record trading period in recent times.
This includes new clients, revenues as well as profits. "However, given the prevailing market volatility, the board has decided to withdraw from its plan to seek a listing on the London Stock Exchange at the present time. Our options remain open, including potentially returning to the market," he added. Although the response received in the pre-road show has been termed as great, institutional investors told CMC that they were uneasy about new floats given the fluidity of the markets at the present time.
Deutsche Bank and JPMorgan Cazenove were also involved in the decision to postpone the float in their capacity as joint bookrunners. Mr Cruddas, who is one of the City's richest men, has 92.2 percent of the business and was hoping to sell roughly a third of it. The move could have netted him £240 million. But recognizing that it would have been futile to proceed, he decided to put the float off although he has firmly committed to it.
Sources close to the operation said that the float was risky at this moment, "Any observer who knows the market will know we want to do the right thing as a group. One day does not a mountain make. The flotation can be later on. We are not in any hurry," one unnamed source said.
The London markets have been punched dry in recent days. The FTSE 100 Index fell more than 550 points in less than 14 days, while the FTSE 250 Index hit a new low since falling after the 9/11 attacks in 2001.
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