Brace yourself for the tidal wave of stock-market flotations that has been gently waiting for summer to finish before it washes into the public arena.
Just waiting in the wings, we are told, are Jimmy Choo’s shoes, housebuilder Countryside, RAC, British Car Auctions, Moy Park — the meat processor whose hoardings adorned the World Cup — challenger bank Aldermore and Irish energy group Viridian. There will be more.
Floats worth as much as £7 billion in total could be announced next month. Thank goodness George Osborne has put off any idea of selling the taxpayers’ remaining stake in Lloyds Banking Group until after the election.
All the talk is of buoyant market sentiment and demand for equities over low-yielding bonds.
But two things are worth noting. First, almost every one of these forthcoming floats comes from a private equity owner which has probably been forced to hold on to the business far longer than it had planned. When private equity wants to sell, why should we want to buy?
Second, the first half of the year is hardly one of great flotation successes. The likes of Saga, Just Eat and OneSavings Bank are all trading at discounts to their offer prices. AA, Polypipe, Brit, TSB and Poundland have hardly made their new investors wealthy.
Even the best of the bunch have not gone wild, with shares in Patisserie Valerie up 11%, Kate Swann’s SSP climbing 20% and Game Digital ahead by 30%.
Not every flotation this autumn will be a dud. But many of them will be asking new investors to put their money where old ones want out.
