Eutelsat’s IPO abandoned
Eutelsat, the world’s third largest satellite operator, dramatically abandoned its planned initial public offering (IPO) on the Paris Euronext late last night, citing volatile European stock markets.
The news comes after Eutelsat was forced to slash its IPO valuation by 20 per cent to around €2.7bn (£1.83bn) on Tuesday, because investors thought its price was too high.
Last night the company said that despite an oversubscribed order book it had cancelled its float because of “adverse market conditions”.
It added that “volatile market environment would not reflect the fundamental value of the company”.
However, many investors thought the company had not made sufficient returns to justify its valuation.
On Tuesday, the business which operates 23 satellites, had to cut its share price to €12-€13.8 from €15.25-€17.75.
Also, private equity investors and executives who currently own the company agreed not to sell shares for at least six months, further cutting the amount the company would raise. But all this was not enough to save the flotation.
The news could have a dampening effect on other IPOs in the pipeline, one person close to the process said last night. “We are not at the stage where we can say the IPO market is closing down,” he said, “but I think there are going to be serious questions over all forthcoming IPOs.”