Aldermore scraps plans for IPO

Aldermore, the specialist small business and mortgage lender, has ruled out listing on the stock market until after the UK general election in May next year.

The bank, backed by AnaCap, Morgan Stanley and Goldman Sachs’s investment arms, today scrapped its initial public offering after the FTSE 100 slid almost 5 per cent this month and investors turned more cautious towards listings.

People familiar with the situation said the company is unlikely to list before the election, as economic headwinds in Europe and market uncertainty could last until next year.

Phillip Monks, chief executive, said: “It was fundamentally an issue of the broader markets – that’s the key concern. The state of Germany and Europe, markets are jittery and it will have a ripple effect.”

Aldermore, one of the so-called “challenger” banks that are emerging as rivals to the big four listed high street lenders, had aimed for a valuation of about £800m on the London Stock Exchange, with an initial price range of 217p to 265p per ordinary share.

But one person close to the situation said the flotation was priced too high, even at the lower end of the 217p-265p range, while the sell-off in mid-cap stocks has also dented fund managers’ appetite.

Joseph Dickerson, equity analyst at Jefferies, said: “Clearly if you look at the market environment right now, it’s not the best to IPO – the FTSE is off around 7 per cent year to date. For a lot of investors, it is tough to stomach an IPO.”

Appetite for IPOs has soured markedly in recent months, through a combination of falling markets and a clutch of deals that fell sharply on their debuts.

In a statement, Aldermore said on Wednesday: “Due to the recent deterioration of global equity markets, Aldermore’s board and shareholders have elected not to proceed at this time with the initial public offering”.

Jimmy Choo, the upmarket shoemaker, earlier this week narrowed downwards the price range for its looming IPO, but others have had to scrap theirs after a slew of disappointing performances from companies such as Rocket Internet, Zalando and Pershing Square.

The bank insisted that it would continue to press on despite the shelved IPO.

“Aldermore continues to perform strongly, with excellent organic loan growth and a proven track record of delivery through its modern, digital platform. AnaCap, as a long-term investor, will continue to support the next phase of its development,” it said.