WE Soda abandons London IPO plans citing ‘extreme investor caution’ in fresh blow to the City

Chemicals producer WE Soda has cancelled its upcoming London float, prompting further concerns about the City’s Initial Public Offering credentials. 

Last month, WE Soda announced its plans for an IPO, in a deal that was set to value it at between £6 and £7billion.

It provided a much-needed boost to the City, following Cambridge chipmaker Arm opting for a US float, and CRH’s decision to switch its listing to New York. 

However, just a week after announcing its plans to float in London, WE Soda announced it had cancelled them, citing ‘extreme investor caution’.

WE Soda has abandoned its upcoming London IPO in a fresh blow to the City 

‘Investors, particularly in the UK, remain extremely cautious about the IPO market and this extreme investor caution in London meant that we were unable to arrive at a valuation that we believe reflects our unique financial and operating characteristics,’ chief executive Alasdair Warren said.

WE Soda’s headquarters are in London but it operates in Turkey and Wyoming, US, where it produces natural soda ash, used in glass manufacturing, detergents and soaps, plus batteries for electric vehicles. 

The float would have been the UK’s biggest since GSK’s demerger of its consumer health arm Haleon last July. 

Susannah Streeter, Hargreaves Lansdown’s head of money and markets, said: ‘This is fresh blow for London just as confidence in the city as an IPO launch pad appeared to be edging back upwards. 

‘Investors are understandably cautious given the nervousness surrounding the UK’s prospects with inflation is still running so hot.

‘Gilt yields have soared to levels not seen for 15 years amid expectations the Bank of England will have to fire off fresh rounds of interest rate hikes. 

‘The uncertainty ahead is clearly off-putting and companies considering IPOs may continue to set their sights on New York instead.’