Drinks firm calls off flotation

Nervy investors were dealt another blow today as Irish drinks and snacks company C&C called off a planned €1.1bn flotation just hours before a deadline to sign up for shares.

The group cited market volatility for the decision, which follows similar moves last week by Yellow Pages business Yell and DIY giant Focus Wickes. Both had also been lining up a float on the London Stock Exchange.

A statement from C&C, which had been due to begin conditional trade in London and Dublin on Wednesday, said: ‘‘In the light of current economic conditions, the board of directors of C&C group has decided to withdraw the initial public offering of the company.’’

It was understood that the decision was taken yesterday. A company source said that although promotion of the flotation went well, ‘‘market uncertainty won out in the end’’.

The spokesperson added that once the market had stabilised, the company would review its position, commenting: ‘‘Right now, everybody is very disappointed that we can’t proceed.’’

Analysts believed C&C’s planned flotation would go ahead despite the recent market turmoil and the postponements by Yell and Focus Wickes and fashion label Prada in Italy.

The company owns brands that include Tayto crisps and Ballygowan mineral water, and had been seen as a more reliable bet for investors than firms from new economies such as telecoms or software.

Fears that the weak IPO market - the market for new share issues - could hit other floats were eased by confirmation from luxury goods brand Burberry that it remained ‘‘on track’’ to join the market.

South African-owned stockbroker Investec also released plans to obtain a listing in London.

Investec will sell 10 million new shares, equivalent to around 8.4% of the company, to raise close to €155m. Conditional trading on the London Stock Exchange is expected to start on July 22.

Burberry, owned by Great Universal Stores, is only selling off 25% of its shares under its own flotation and analysts believe this should help its chances of making it to market.

Alex Scott, of Seven Investment Management, said other companies may now have to lower the price of shares to successfully float. He added C&C’s decision would add to the frayed nerves in the City.

‘‘This decision confirms that the IPO market is very very sensitive. Companies that don’t have to float at the moment are exercising their choice not too,’’ he said.

‘‘For investors looking at IPOs it makes it very tricky, there’s not going to be as many companies coming through as hoped and those that are may have to price more keenly to get a float away.’’

C&C, formerly known as Cantrell and Cochrane, would have been the first Irish company to float on the Irish market since the Paddy Power bookmakers and leisure group in December 2000.

The company had planned to list on the Dublin and London stock exchanges this Wednesday and had set a price range of €2.60 to €3.60, valuing it at about €1.1bn.