Hogg Robinson blames US slowdown for scrapping float

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Hogg Robinson, the corporate travel company, has been forced to abandon its planned £380m flotation, after investors took fright at possible cuts to business travel budgets and signs of a US economic slowdown.

This was despite the fact that some of the City's biggest names were behind the issue. The combined might of Lazard, Merrill Lynch, Citigroup, Credit Suisse and Lehman Brothers failed to get the float away.

The company became the latest casualty of volatile stock market conditions. The flood of listings expected this month, after the stock market downturn that hit in May and June and continued over the summer, has not transpired.

Roger Cursley, UK equity strategist at Investec, said: "There are a lot of new issues sitting on fund managers' desks at the moment. We had expected the pipeline to push ahead in September but not a lot have come to fruition yet."

In the Hogg Robinson case, City sources suggested that it was nervousness about global macroeconomic factors that made fund managers baulk at taking part in a sizeable offering. There were also concerns over corporate travel budgets, despite the fact that the company was marketing itself on the basis that its revenues came from 3-5 year contracts, not commissions on individual bookings.

Only a third of the Hogg Robinson business comes from the UK. The possible bursting of the US housing market bubble is top of investors' concerns about the US economy.

Permira, the private equity group that took Hogg Robinson private in 2000 for £232m, was not prepared to accept a bottom-end valuation.

The company did not provide a detailed explanation yesterday. A statement simply said: "The IPO of Hogg Robinson which was scheduled to commence trading on the London Stock Exchange in the near future has been delayed due to the present market conditions."

The company, which sought to raise £190m, had priced the issue at between 140p and 220p. The grey market price ahead of yesterday's announcement was 155p, although there were suggestions that Permira would have had to take a price even below the bottom of the price range.

Adam Hart, the head of business development at KBC Peel Hunt, said general "fatigue" about new issues was the problem. "We have extremely tricky conditions in that fund managers are sick of IPOs."

Among IPOs that have recently been delayed were the cinema operator Cineworld, the Russian discount supermarket chain Kopeika and the Cordea Savills German Property fund. However, some have gone ahead, including the Guernsey-registered property fund Kenmore European Industrial Fund. Last week, the homewares retailer Dunelm Group said it planned to raise £120m in October.

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