The boss of WE Soda has said New York would be a “credible alternative” for a stock market flotation, a day after the world’s largest producer of natural soda ash ditched plans to list in London because of a disappointing valuation.
Alasdair Warren, the chief executive of WE Soda, said the business had abandoned plans to list in London just a fortnight after announcing the move because valuations were “unrealistically low”. Despite saying two weeks ago that “London still works”, the company now judges that investors “remain extremely cautious” about the initial public offerings market.
Warren told BBC Radio 4’s Today programme: “London made sense for us at this point in our development, we’re growing our business, we’re going to double in size over the next few years. And all of that principally will be in North America. So perhaps when we reconsider coming back to the market, that will be a credible alternative.
“The breadth of engagement which I talked about before was absolutely there. The issue was more about valuation … and it’s not just a UK issue. It’s a broader European issue around performance of IPOs. And what that’s meant is driving valuations which are, in our opinion, unrealistically low.”
The decision to abandon the UK listing is a further blow to the City and Rishi Sunak’s ambitions, after the Cambridge-based chip designer Arm opted to pursue a US-only listing in March.
Warren said it would now be some time before WE Soda would reconsider a stock market flotation.
“The market effectively has been closed for almost two years. We thought that the characteristics of our company would enable us to reopen the market. It feels to me like it’s going to be some time away with a consistent upward movement in markets before risk appetite is such that IPOs can really work,” he said.
Commenting on WE Soda’s decision on Wednesday to scrap the planned London listing, Susannah Streeter, the head of money and markets at Hargreaves Lansdown, said: “This is a fresh blow for London just as confidence in the city as an IPO launch pad appeared to be edging back upwards. Investors are understandably cautious given the nervousness surrounding the UK’s prospects with inflation is still running so hot.”
CAB Payments confirmed on Thursday it would push ahead with its planned flotation in London in July. The float is expected to value the the payments firm at between £800m and £1bn.
Ann Cairns, its chair, said there was “significant interest in CAB Payments” and that the move reflected the firm’s “confidence in the UK as the home for innovative and growing global businesses”.
