WE Soda chief executive Alasdair Warren said issues of valuation drove the decision to pull its eagerly awaited initial public offer.
Speaking to BBC Radio 4 on Thursday morning after shelving the IPO the previous afternoon, he said that the breadth of engagement from potential investors was there but that valuations were “unrealistically low”.
He accepted that IPO valuations usually implied a discount to fair value but said this discount had “effectively doubled”.
This meant valuations were at a level that didn’t “make any sense for the company.”
While it made sense to list in London now, Warren said he may have to reconsider plans should they decide to float in the future.
He said it would depend on IPO market conditions in Europe and the balance of business between the US and Europe at the time.
He stressed the decision to pull the float was a “function of the market, rather than the company.”
Warren reckons it will take some time, and probably a period of market strength, before there is an appetite for IPOs to work.
The IPO would have been the largest float in London this year with the firm, the world's largest producer of natural soda ash, expecting to be valued between US$7.5bn to US$8bn.