Monday, 28 June 2010
Is The City losing it?
Firstly there is DP World pulling its long running idea of a secondary listing in London (which in many ways would be a re-list of P&O, the business DP World bought a few years ago).
Then there is news that Fitness First, the globally expansive gym business, is going to look to list in Asia rather than London - a loss of another £1 billion pound float.
There is a trend not to list in London emerging, but in fact with these two it is not the case. Dubai World is really struggling under its debts and stricken financial position. It clearly can't even get its accounts in order to try and push a float.
Fitness First is a loss-making Private Equity owned vehicle whose owners are desperate to get some return for their investment. In the Far East perhaps they hope to find some less discerning investors who believe their hype about EBITDA growth instead of looking at the bottom line. A classic case of Tourism IPO.
In fact, with BP getting shredded in the US, it is quite likely that New York will see another decline in foreign companies wanting to list there as well. Clearly the threat will be from Hong Kong and Singappore in the future, but it is not all downside for The City yet.