ICL chief ousted as computer giant cancels £5bn stock market flotation

ICL, the computer services giant owned by Japan's Fujitsu, executed a dramatic U-turn yesterday, cancelling its relisting on the London Stock Exchange and announcing the resignation of its chief executive, Keith Todd.

ICL, the computer services giant owned by Japan's Fujitsu, executed a dramatic U-turn yesterday, cancelling its relisting on the London Stock Exchange and announcing the resignation of its chief executive, Keith Todd.

The flotation, which just months ago had attracted talk of a £5bn price tag, would have been one of the largest of the year and had been provisionally set for autumn. The decision makes ICL the latest in a string of hi-tech groups that have delayed, downsized or ditched their floats as investor sentiment towards the sector has switched from near uncritical acclamation to virtual hostility.

ICL yesterday blamed tough trading conditions in the information technology industry and its own unsatisfactory financial performance for the surprise decision, which was taken at a company meeting last Friday.

ICL said: "Fujitsu and the board of ICL believe that it is important for ICL to concentrate on growing and strengthening the business in the next phase of its development without the additional challenges involved in preparing for a flotation. ICL's flotation has therefore been suspended indefinitely. In the light of Keith Todd's close identification with the flotation of ICL, he has tendered his resignation as chief executive."

ICL was delisted in 1984, after it was taken over by Standard Cables and Telephones, a communications group. Fujitsu bought the business in 1990.

Mr Todd, who had been with the group for 13 years, told staff in prepared comments that he was "proud to lead ICL over the past five years through dramatic changes to become a leading e-business service services company". He was unavailable for further comment last night. No details of his severance package were disclosed.

ICL had yet to appoint advisers for the planned relisting, which had formed the centrepiece of its results presentation as recently as last April.

ICL and Fujitsu executives have been told by a range of investment bankers that given the fall-out in hi-tech valuations, ICL would not have commanded the price tag that it, and its parent group, desired. Analysts said that in the present climate, ICL would have been valued at about £2bn.

It is also understood that there was additional concern in the City about ICL's performance. Last year, the group recorded operating losses of £69.7m on turnover of £2.7bn. The losses have come as ICL has repositioned itself from a manufacturer of computer hardware to a service provider for the sector, with an emphasis on online business.

An ICl spokesman said: "We've got to work on our margins and see that our business does work better."

ICL said that Richard Christou, commercial and legal affairs director, had been appointed as deputy chief executive and would take on Mr Todd's duties on a temporary basis. A hunt for a permanent replacement had been launched, with a focus on Europe and North America, the company said.

ICL also backed away from floats for several of its business units, including KnowledgePool, an IT training unit, which had been set for a £400m London listing this summer. A push to float ICL Invia, ICL's Nordic unit, on the Helsinki bourse has also been shelved.