German Property IPO Pulled in Blow to Guy Hands
Private equity veteran Guy Hands has been forced to pull his 900 million euro ($1.2 billion) IPO for Deutsche Annington, Germany's largest residential real estate company, after volatile markets derailed investor demand.
The move, which harks back to the list of failed IPOs in 2010, will come as a blow to Hands, who has been fighting to regain his reputation after losing 1.75 billion euros ($2.27 billion) on his investment in music group EMI.
It will also come as bad news for public markets which seem to have become unstuck in recent weeks following comments from the Federal Reserve about ending quantitative easing and fears of a credit crunch in China.
There is a backlog of private equity firms looking to float in the fourth quarter of this year or in the first quarter next year that could now be forced to abandon plans.
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LEG, another German IPO backed by Goldman Sachs, has traded down from its 1.3 billion euro float, while Africa-based energy group Caracel Energy was forced to scrap attempts to raise money just last month. Upmarket notebook designer Moleskine, which floated in Italy, has been the worst performing IPO in Europe, losing more than 30 percent of its value since listing.
But there have been some exceptions. Crest Nicholson, a builder of upmarket homes, has risen nearly 40 percent since its stock market debut in London in February. U.K.-based insurer, Esure has also gained since its IPO in March.
Deutsche Annington was part of a list of portfolio companies Hands had been hoping to sell. In the U.K., Hands has already refinanced Annington Homes, which rents houses to the U.K. Ministry of Defence.
But deals to offload cinema group Odeon, gas company Pheonix and Irish gas company Infinis are still in the works.
The plans have been part of Hands' efforts to return cash to investors before launching a new round of ambitious fundraising. In recent years some of the financier's historic backers have vowed to cut ties with him following the EMI fiasco which led to a drawn out legal battle with Terra Firma's lender Citigroup.
(View More: IPO Market Staging a Comeback?)
EMI, home to Coldplay and the Beatles, was the backdrop to one of the City's most controversial disputes, dragging both Hands and investment banker David Wormsley into the spotlight both in the U.K. and in the U.S.
Despite losing control of EMI, Hands has now launched a second legal assault in the hopes of recovering some of the money invested.