A £1.7bn flotation by specialist hotel group Vector was pulled last night after investors failed to support what would have been the biggest share sale in London this year.
The decision to postpone the deal was taken despite a move to cut the offer price and extend the offer period to last night. The share sale was due to raise £2.2bn but the group had been forced to scale back its ambitions in the face of concerns raised by City investors about the price of the deal and the way the company was structured.
Investors had tried to force the price down further from the revised range of 875p to 900p during a difficult day for share trading. Last night the company blamed the postponement on "market conditions" after the FTSE 100 index of blue chip shares closed 110.1 points lower at 6522.7, and the FTSE 250 of smaller shares dropped 283.8 points to 11,782.47.
The market was unnerved by a research note from analysts at investment bank Morgan Stanley which cited a number of sell signals for shares and general caution ahead of today's decision on interest rates. Although a small majority of analysts believe the Bank of England will leave the cost of borrowing unchanged, at least for this month, the decision by the European Central Bank to increase rates and an opening decline on Wall Street because of renewed inflation fears added to the generally gloomy atmosphere.
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