A test for an IPO market that has been tricky for all but the very best

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The Independent Online

Opinions might be divided on the group's long-term prospects, but Ocado is likely to launch its IPO on Wednesday. In doing so it will join others seeking a listing in what has been a difficult market so far this year.

The betting exchange group, Betfair, pulled plans to float in 2005, but is now understood to have appointed Goldman Sachs and Morgan Stanley ahead of an autumn flotation, which could come as early as September. The company is said to be "95 per cent certain" that it will press ahead with the plans. The IPO is expected to be worth about £1.5bn.

With gold prices flying up as high as $1200 an ounce thanks to uncertainty about other asset classes, getting investors interested in African Barrick Gold, a subsidiary of the world's biggest gold-mining company, was not a difficult job. But even with the stars aligned for African Barrick Gold's IPO, the group priced its shares at 575p, the bottom end of the 550p to 650p initial guidance.

It also no doubt helps to have a famous name when persuading the market to part with its money. Nat Rothschild, part of the famous banking clan, raised £700m earlier this month, listing Vallar, a mining-investment firm. The IPO was no doubt helped by drifting valuations among other mining groups, which Vallar is hoping to raid in the coming months.

But there have been the failures too. Officially, the private- equity-owned Merlin Entertainments, which runs Madame Tussauds and Legoland, never finally decided on an IPO, but the market had been expecting a deal worth about £2bn from in February or March.

Equity investors who were faced with a glut of rescue rights issues throughout 2009 said that they had little to allocate and would prefer to back deals that, unlike Merlin, were not private equity firm exits.

Another private equity- owned group, the airline ticketing outfit Travelport, abandoned its planned listing in February. The £1.2bn flotation, which was set to be London's biggest deal for more than two year, was halted as investors balked first at the 210p to 290p price range, and then at the fragile state of the market. There has been no update about any new IPO attempt by the company.

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