Biffa expected to cancel IPO

By Robert Venes

LONDON, Oct (Shenzhen: 000069.SZ - news) 12 (IFR) - Bookbuilding for UK waste management group Biffa's London Stock Exchange IPO closed today without a covered message, suggesting the float could be cancelled.

Bankers working on the deal said that there had been no messaging on coverage or price guidance throughout the two-week bookbuild, with the book closing earlier this afternoon.

That would suggest a cancellation is imminent, but the bankers said an announcement today was not certain.

The IPO was largely primary, with Biffa expected to raise £275m-£285m for a free-float of around 50%. Selling from shareholders Bain Capital, Angelo Gordon and Avenue Capital Group was expected to be limited, potentially just to provide a 10% greenshoe.

Proceeds were to reduce net debt to around twice the company's underlying Ebitda and a payment related to a dispute over landfill taxes.

IPOs dominated by primary proceeds used simply to repay debt resulting from private equity ownership can be a tough sell.

Pure Gym, another UK listing candidate, cancelled its IPO yesterday after just getting over the line on coverage and only hours before books were due to close for its LSE listing. Like Biffa, it was targeting primary proceeds for debt reduction and a high free-float of up to 49%.

Citigroup (NYSE: C - news) and JP Morgan are joint global coordinators and joint bookrunners with HSBC on Biffa. Peel Hunt is lead manager. Rothschild is advising. (Reporting by Robert Venes)