What happens if the US elects Donald Trump its next president? How will Brexit fallout affect the larger world economy? Those are among the enormous geopolitical questions that have helped chill the IPO market throughout the world for much of 2016.
The latest victim of widespread uncertainty is Australian poultry provider Ingham’s. After initially filing to raise about A$1.1 billion (~$850 million), TPG has nearly halved the size of the upcoming Ingham’s IPO on the Australian Stock Exchange, lowering the company’s fundraising goal to roughly A$596 million. Ingham’s plans to sell 189.3 million shares at A$3.15 apiece and anticipates a market cap of about $1.2 billion.
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“The US election will have a big impact,” Ian Turner, the head of corporate finance in Australia for Deloitte, told Reuters. “That will impact investor confidence.”
The announcement comes less than a week after banking software provider Misys (backed by Vista Equity Partners) canceled its IPO plans entirely in London, the latest in a long line of postponed or diminished offerings in the US and the UK. It also marks the third downsizing on the Australian public markets in the past two weeks, after Bravura Solutions and Charter Hall Long WALE both repriced flotations. Whether the trend continues could largely be determined by voters more than 8,000 miles away.
TPG has backed Ingham’s since 2013, when it reportedly paid more than A$850 million for the business. Entities related to TPG own a 90.1% pre-IPO stake in the company and will retain a 47% stake upon completion of the offering. Ingham’s is set to start trading November 7, the day before Americans head to the polls.
Article by Kevin Dowd, PitchBook