Brakes swerves IPO plans as market volatility hits valuations

The London fundraising market for new issues is suffering as food distributor Brakes Group on Tuesday shelved its initial public offer due to recent volatile stock market conditions, with CMC Markets cutting its valuation and Metro Bank also wavering.

Brakes, which was being floated by private equity owner Bain Capital after almost a decade, could now offered up as a trade sale.

City sources said recent investor nervousness had persuaded Bain to put the brakes on the IPO, according to the Guardian, even though the company had not officially revealed any float plans.

Advisers including Goldman Sachs, JPMorgan, Barclays and Lazards had reportedly been talking to potential institutional investors about a listing.

Several high-profile IPOs look set to continue in January and February, though with valuations somewhat depressed.

National Australia Bank last week priced the Clydesdale Bank offer ahead of next month's planned debut, some £500m below expectations.

And while CMC Markets is also continuing with its entry onto the London Stock Exchange, it was revealed on Tuesday that the spread betting group has priced its IPO at a level that could value it at around £736m, some way short of optimistic initial plans.

City analysts have suggested that Metro Bank's IPO is likely to go at a knock-down price, if it goes ahead, after in December hinting at a postponement in lieu of raising funds from private investors instead.

The volatility towards the end of last year saw both Acacia Pharma and Shield Therapeutics postpone their £100m-plus London listings in October due to the stock market uncertainty, while in November levels of abandoned flotations in Europe hit their highest quarterly level in nearly seven years.