Online realty company PropertyGuru on Wednesday cancelled its initial public offering (IPO) in Australia because of market volatility, the country's second scrapped listing of a private-equity backed company on the day and the fourth this month. Bain Capital earlier on Wednesday said it would not proceed with the listing of Australian franchise network Retail Zoo, underscoring the weakness of the Australian IPO market after two other failed floats in recent weeks including one touted as the country's biggest of the year.
"Despite strong engagement throughout the process with prospective investors, the board and existing shareholders have determined not to proceed with the offer," PropertyGuru Chairman Olivier Lim said in an emailed statement. "This decision took into account current IPO market sentiment."
Southeast Asia online realtor PropertyGuru - owned by private equity firms KKR and TPG Capital - and its brokers expected to raise up to A$380.2 million ($260 million), and had enough demand for shares at the lower end of its previously flagged range of A$3.70 to A$4.50 on Tuesday. Private equity firm Bain Capital cancelled management meetings as part of the IPO process for retail company Retail Zoo, which owns the Boost Juice drink franchise, also citing market volatility.
New IPOs have raised just $416 million in the first nine months of 2019, the lowest amount for the period since 2012, according to Refinitiv data. The decline in new listings comes despite an 18.2% jump for the stock market this year and record low official interest rates. "Volatility in the listed market is creating questions about the performance of those companies in the secondary market, and hence investors and bankers are deciding that it is perhaps best to wait until there's less uncertainty," said Jun Bei Liu, a portfolio manager at Tribeca Investment Partners.
She said her fund had been interested in investing in Retail Zoo, but PropertyGuru was "challenging" given its lack of profitability and recent share price falls in tech companies including Afterpay Touch Group and Uber Technologies Inc. The halted listings on Wednesday come on the back of the cancellation last week of what was hoped to be the country's biggest listing of the year, private equity giant KKR & Co and partners' float of lender Latitude Financial.
Consumer lender Latitude's planned A$1 billion IPO - its second attempt at a listing in just over a year - was pulled after the offer failed to attract sufficient strategic investors. "Investors are very skittish on IPOs at the moment and that's affecting our ability to get sufficient demand at prices at which the companies are actually willing to deal," said one of the people involved in the cancellations.
"It's very disappointing."
The person declined to be identified because they were not allowed to speak to the media.
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