More Italian companies will likely postpone until next year their plans for a stock listing because market turmoil has made investors wary, according to bankers and investors. World markets have tumbled this week as concerns about the US economy grew.
The Federal Reserve has lowered its growth outlook for the world's biggest economy amid a credit crunch provoked by massive defaults in the subprime mortgage market. Fears of inflation also are rising as the cost of raw materials like oil remain stubbornly high.
As a result, Italian wind farms operator Fri-el ditched plans to list its stock this week. Rainbow, maker of the Winx Club television cartoon series, was likely do the same, a source close to Rainbow's plans told Reuters. Private equity firm Futura and consumer credit provider Ktesios also have decided to wait until next year for conditions to improve.
Companies elsehwere in Europe also have had a change of heart about going to market. Austrian radio gear maker Frequentis called off its IPO this week, as did Avantium, a spin-off of Royal Dutch Shell. "People will come back to talk about listings next spring," said Stefano Bellavita, a senior partner at merchant bank Eidos Partners.
"But that means starting to work on those dossiers now and, in this climate, its not easy." Some companies are going ahead with their plans regardless of the market conditions. Finaval, whose initial public offering (IPO) was closed on Friday ahead of a listing at the end of the month, has been "satisfied by the interest shown by investors," a market source told Reuters.
But it might be forced to set its final offer price at a discount to its competitors, the source added. Such was the fate of Maire Tecnimont, the engineering firm that cut its price to 2.80 euros a share, below the offered price range of 3.50-4.75 euros. It begins trading on November 26.