Is Ocado looking to pull £1 billion float?
Unofficially Internet grocer Ocado is rumoured to be considering pulling the £1 billion flotation of the group after the revelation that Fairfield Energy, a private equity backed North Sea oil business, looks almost certain to pull a fund raising for £330 million. It would appear that investors have shied away from the new issues market which is not a good sign for Ocado and its proposed £1 billion valuation.
Unfortunately, in the current market climate it seems that investors are turning their back on new investments and would rather sit on sidelines in the short to medium term to see how the UK economy performs. Some investors and analysts had already cited reservations about the £1 billion valuation for Ocado although whether this has anything to do with the potential pull of the float remains to be seen. It will be interesting to see whether the company does officially announce the abandonment of the float later this week or indeed whether we see a last-minute recovery in the new issues market.
Very often new issues are the first casualties of market uncertainty and market concerns and if these two floats are officially pulled later this week it is unlikely we will see any significant new issues in the short term.
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