LONDON’S BUSINESS NEWSPAPER
MARK KLEINMAN THE MAN IN THE KNOW’S MUST-READ SQUARE MILE COLUMN P10 THURSDAY 15 JUNE 2023
ISSUE 3,996
ENGLAND EXPECTS CHRIS TREMLETT’S PREVIEW OF A SPICY ASHES SUMMER P26
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SODA FLOAT GOES FLAT
BIGGEST LONDON LISTING OF THE YEAR PULLED DUE TO ‘INVESTOR CAUTION’ CHARLIE CONCHIE LONDON’s markets were dealt a fresh blow yesterday as WE Soda dramatically ditched its plans for an IPO due to “extreme investor caution” just weeks after first announcing the move. The Turkish-owned soda ash maker had delivered a boost to the beleaguered London Stock Exchange last week when it revealed what would have been the biggest float in London this year. However, in a statement yesterday, boss Alasdair Warren said the float had been withdrawn.
“Investors, particularly in the UK, remain extremely cautious about the IPO market and this extreme investor caution in London meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics,” he said. The company planned to raise at least £600m through the IPO for its parent Ciner Group, on an £7m+ valuation. WE Soda said last week it had already received “considerable” interest from investors. The initial announcement was hailed as a potential end to the market drought in the capital after a torrid start to the
year. Though some in the City yesterday said the pullout was more about the company than the capital, other analysts said the withdrawal from WE Soda would likely renew fears over London’s appeal for listings. “This is a fresh blow for London just as confidence in the city as an IPO launch pad appeared to be edging back upwards,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “Investors are understandably cautious given the nervousness surrounding the UK’s prospects with inflation still running so hot.”
She added that the uncertainty shaking the UK economy is “clearly off-putting” and firms considering IPOs may continue to “set their sights on New York instead”. London Stock Exchange officials and regulators have been scrambling to revive the appeal of London after the bourse was dealt a series of high-profile snubs, including the move from British chipmaker Arm to float in New York. The Financial Conduct Authority announced a package of reforms earlier this year to ease the IPO process, while top City figures have been looking to overhaul the “cultural attitude” of the Square Mile to tempt in more listings.
FREE TELECOMS MERGER
Watchdog to look at Voda’s Three tie-up JESS JONES BRITAIN’S competition regulator is set to scrutinise the tie-up of Vodafone and Three, announced yesterday. The deal will create the largest mobile network in the UK, turning the market effectively into a ‘big three’. Vodafone boss Margherita Della Valle said the merger is “great for customers, great for the country and great for competition”, but commentators warned last night the Competition and Markets Authority (CMA) was likely to turn a critical eye to the deal. In 2016, the watchdog made clear their “serious concerns” about The CMA will soon be on the the merger phone between network providers Three and O2, leading the European Commission to block it. Pablo Pescatore, a telecoms analyst, said the failure of 2016 has set a precedent and this could be a “hard sale given that both companies have been outperforming the market for the last year or so”. The firms said they were “levelling the competitive playing field” with EE and O2. £ CONTINUED ON PAGE 3
Federal Reserve pauses interest rate rise campaign as US inflation subsides JACK BARNETT THE US Federal Reserve last night held off on firing interest rates higher for the first time in over a year, electing to wait and see what impact prior increases have had on the world’s largest economy. Chair Jerome Powell (pictured) and
the rest of the Federal Open Market Committee (FOMC) kept borrowing costs unchanged at a range of five per cent and 5.25 per cent. Fed officials’ decision to take their foot off the brake was charged by stateside inflation falling rapidly from its peak of just over nine per cent to four per cent.
Core inflation remains a concern, which the FOMC said could lure it back into rate rises in the summer if it persists. “The committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the
committee’s goals,” it said in its latest policy statement. The US’s rate hold stands in stark contrast to where the Bank of England is tipped to send borrowing costs in the coming months, with markets now expecting UK
interest rates to peak at 5.75 per cent. UK gross domestic product figures out yesterday from the ONS showed the economy grew 0.2 per cent over the month to April, meaning Britain is still swerving that much-tipped recession. £ CONTINUED ON P3
INSIDE BRITISH TOURISM PLEAS FOR POST-BREXIT HELP P4 WEST END BACK TO LIFE P5 INTERVIEW: RISHI KHOSLA ON BRITAIN’S TALL POPPY SYNDROME P8 OPINION P14-15