LONDON (Alliance News) - There were mixed fortunes for the latest stocks to list on the London main market Monday, as roadside assistance and financial services company AA PLC saw its shares slide below its initial public offering price in early conditional dealings and River and Mercantile Group PLC headed higher.
The AA confirmed that it priced its IPO on the main market in London at 250 pence a share, giving it an initial market capitalisation of GBP1.39 billion. However, the stock was trading at 241 pence in early dealings.
It said the IPO had been oversubscribed, and private equity groups Charterhouse Capital Partners, CVC Capital Partners and Permira, its former owners, sold their entire stakes in the business. It sais its new shareholders include Aviva, Blackrock, CRMC, GLG Partners, Henderson Global, Henderson Volantis, Invesco, L&G and Lansdowne Partners.
The AA said that it will use about GBP185 million of the net proceeds from the IPO to reduce its leverage, after it issued about 85 million new shares in the offer. It raised in excess of GBP3.0 billion of debt through the bank and capital markets in July 2013 via an investment grade secured corporate financing.
Its former private equity owners had also floated the over-50's insurance provider Saga PLC on May 23. Saga is also trading below its 185 pence IPO price at 169.563 pence. Several other recent listings have also dropped well below their IPO prices amid fears that valuations had gone too high earlier this year.
Unconditional dealings in the AA are set to start June 26.
Meanwhile, advisory and investment products business River and Mercantile Group PLC said it priced its IPO on the main market at 183 pence a share, giving it an initial market capitalisation of about GBP150.2 million. The stock was trading at 189.3 pence in early dealings.
It expected the offer to raise gross proceeds of GBP41.5 million, and for it to get about GBP15.0 million by offering new shares.
Unconditional dealings are expected to start June 26.
By Steve McGrath; stevemcgrath@alliancenews.com; @SteveMcGrath1
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