Russia’s leading mobile retailer Euroset, whose IPO on the LSE was scheduled for this week, decided today to postpone the operation.
“Despite increased interest from the investment community in Euroset, we decided to postpone the IPO due to volatile market conditions,” said President Alexander Malis, adding however that the company still expects to realize its strategic plans.
Euroset appeared to lack appeal for investors. The books, which were set to close yesterday evening, were not even filled to 10%, a source familiar with the operation told Vedomosti, a Russian business daily.
In late March the company announced its intention to go public, after reporting impressive financial results for 2010. It then promised to pay—for the first time and as early as 2012—dividends of up to 75% of the consolidated net income of the preceding fiscal year.
Euroset had thus hoped to raise up to $1.3 billion via the sale of Global Depositary Receipts, based on a total valuation of $2.7 billion to $3.3 billion. Euroset was initially valued even higher—from $3.2 to $4.9 billion—by the banks organizing the IPO, notes Vedomosti.
The company is overpriced, a banker told Dow Jones Newswires. “Amid Japan’s crisis and the Middle East concerns, it also looks a bit overcrowded now with a few Russian companies preparing their IPOs in London.”
Euroset now “does not exclude” proceeding with its IPO on the Hong Kong stock exchange under “favorable market circumstances,” reports RBC daily.
