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LONDON (Alliance News) - CMC Markets PLC on Friday priced its initial public offering towards the lower end of its guided range, as the spread better marked a new chapter in its history by joining the London Stock Exchange in the face of market volatility.
CMC's IPO was priced at 240.0 pence per share, measuring up against a guided range of 235.0p and 275.0p. Nevertheless, the move puts to rest memories of a failed attempt to float back in 2006, when similarly choppy markets forced CMC to abandon plans to go public.
At the IPO price, CMC is valued at about GBP691.0 million, compared to GBP2.69 billion for FTSE 250 rival IG Group, whose shares were up 2.3% Friday.
Conditional dealings in CMC shares on the London Main Market began Friday. The stock was trading just below the IPO price at midday, at 238.75p.
"The IPO marks the next step in our development. With our award-winning technology platform and our clear strategy for growth we look forward to the next chapter of the group's story with both excitement and confidence," Peter Cruddas, founder and chief executive, said.
"Our performance since the start of 2016 continues to be strong, helped by the ongoing market volatility, and we start our life as a public company well-positioned for continued growth and to deliver value for all of our shareholders," Cruddas said.
Spread betters tend to like market volatility, as the fluctuations in market prices attract clients hoping to make money on the movements. But big shocks, such as when the Swiss Central Bank surprised markets in January 2015 by saying it would no longer maintain a fixed exchange rate against the euro, can cause those clients to loss money and fail to pay what they owe.
In that case, the jump in the Swiss franc caught many market participants off guard, but CMC suffered only about GBP4.0 million in credit losses.
Cruddas and his wife Fiona will take the bulk of the GBP200 million IPO proceeds, with Goldman Sachs, the other main selling investor. A total of 90.6 million shares were sold in the offer, including about GBP15.0 million raised for the company itself to cover costs of coming to market.
The founder will see his stake fall to around 62.5% from 89% before the exercise of an over-allotment option that could see the sale of further shares, with Goldman Sachs cutting its holding to just shy of 5.0% from 9.1% previously.
According to a source close to the company, two big institutions are among the company's new shareholders, with Fidelity taking a 3.3% stake and Schroders taking 3.1%.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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