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The owner of UK retailer Superdrug is considering delaying its planned stock market listing until next year, pushing back what would be one of the biggest London market debuts in recent years.
Hong Kong-based AS Watson, part of the conglomerate CK Hutchison, had been aiming for a dual listing in London and Hong Kong this autumn with plans to raise about $2bn in a flotation that would value the business at about $30bn.
A delay to the initial public offering of such a well-known business would be another setback for the UK amid a dearth of new arrivals to the domestic stock market. The London Stock Exchange has been struggling to attract listings and a surge of foreign takeovers has stoked concerns about the market shrinking.
AS Watson had shrugged off market volatility following the war in the Middle East, planning to push ahead with the IPO. However, it now faces potential regulatory and other complications in Asia that mean the listing could slip into next year, according to people familiar with the matter.
The consumer group is best known for its Superdrug brand in the UK but it has 17,000 stores across 12 retail brands in 31 markets, including Rossmann in Germany.
The prospective IPO is a route for Temasek, Singapore’s state-owned investment manager, to divest the near 25 per cent stake it acquired for close to $6bn in 2014, according to people close to the situation. It is also the latest potential deal for CK Hutchison, which is sitting on a cash pile of tens of billions of dollars following the sales of UK assets including UK Power Networks and Eversholt Rail.
As well as the IPO, AS Watson is pursuing the sale of at least one asset. The group is looking at a sale of French perfumer Marionnaud, according to a filing made by its parent company at the start of the month.
People familiar with Hong Kong’s listing rules warned this could represent a ‘material change’ that would require the company to refile its listing materials.
The FT also reported earlier this year that rival conglomerate Jardines was in talks with CK to acquire its supermarket division ParknShop, also part of AS Watson. A CK executive later denied it was considering a deal.
UK market participants had been anticipating a rise in IPOs this year after a prolonged listings drought.
However, several companies including the €19bn software group Visma have delayed plans, extending a broad slump that has meant there have been just seven London listings with a combined market value of £2.2bn so far this year.
The telecoms group Airtel Africa is hiring more bankers for a London listing of its $10bn mobile money business as soon as the second half of this year, in one signal of an upcoming flotation.
CK Hutchison declined to comment.
