Nervous market torpedoes £15 billion worth of London floats

TWO of London’s biggest flotations, expected to be worth nearly £15 billion, were scrapped today as Brexit jitters slammed the door shut on stock-market listings.

Mobile phones network O2, worth £10.25 billion, and £4.5 billion software firm Misys pulled the plug on plans to list in London after demand for public offerings of stock went south.

Fears over Brexit, nervousness about European banks and a looming US election has dented the confidence of investors who buy into these share sales, souring the market. O2 and Misys carry heavy debt piles and fears that growth would fail to keep pace with interest payments killed the deals.

The failed duo join TI Fluid Systems and Pure Gym, both candidates to join the FTSE 250, which shelved plans to sell shares in recent weeks.

Stock-market listings are seen as a barometer of City confidence and the failure of four major floats to get away has triggered fears London is heading for a tougher period.

Misys’s private-equity owners Vista Equity Partners had originally valued the company at £5.5 billion, including £1 billion of debt. This was subsequently cut to £4.5 billion but the market was only willing to pay equivalent to £3.1 billion, sources said.

The firm, which sells software to banks and fund managers, had planned to float tomorrow but decided to walk away last night after deciding the sum on offer was not enough.

02’s Spanish owner Telefonica had also been expected to press the button this month but has called off the plan due to “market conditions”, O2 chief executive Mark Evans said. “You can rule out any IPO in 2016,” he added.

“If the [flotation] market dries up in London it won’t be good for any us,” one insider said. “It’s a sad reflection of where we are.”

Waste disposal firm Biffa listed this month but only by slashing the value of the business by a third. Its shares have tanked since.

All eyes are now on the performance of wound dressing manufacturer Convatec, which got away yesterday but only by selling shares at a bargain basement price.

Telefonica had agreed to sell 02 to rival provider Three for £10.25 billion but Europe’s competition watchdog blocked the deal, leading to a search for a new buyer.