Digicel IPO cancelled due to market volatility
Digicel, the telecoms group owned by billionaire Denis O’Brien, last night cancelled a planned stock market debut in New York that could have valued the business at as much as $10bn (€9bn).
It was expected that the shares would begin trading on the New York Stock Exchange on Friday and raise proceeds of between $1.8bn to $2bn (€1.6bn and €1.8bn) from the highly anticipated share sale.
It would have been the second-biggest stock market flotation in the United States this year.
Digicel said that despite significant support for the initial public offering (IPO) from a high-quality group of investors during the marketing period, “current conditions, particularly in emerging markets, have impacted transaction momentum over recent days”.
Mr O’Brien, who is chairman of the group, said in a statement last night, “Given our growth outlook, an IPO for Digicel was optional and predicated on achieving fair value for the company.
“Recent volatility in equity markets has seen a number of IPOs listing at a discount to their signalled price range and this was a less attractive route for us.”
He added, “Digicel is now at a key juncture in our growth story following a $1.5bn investment programme over the past three years; we generate strong and growing free cash-flow and we have no material debt maturities until 2021.”
There were five stock market flotations on Wall Street last week and in all of them the shares offered to the public were sold at below the expected range. Seven healthcare firms were due to make their market debuts in the United States last week, and three of those flotations were pulled.
