Major UK property company Miller Group has announced that its shareholders voted to cancel the planned initial public offering (IPO) of Miller Homes.
Investors were left bemused at the cancellation of the ₤450 million flotation less than two weeks after the company announced the IPO plan.
Conditions for housebuilders are currently favorable, with low interest rates and government-backed schemes to help buyers gain access to long-term mortgages.
The UK stock market has had a bumpy week, but ended well on Friday. Overall, construction company shares have performed strongly since April, with competitors such as Barrat, Bovis Homes and Crest Nicholson all rising by between 4% and 5%.
In a statement, the Edinburgh-based company said:
“In light of the recent financial markets volatility, the Shareholders of Miller Group have elected not to proceed at this time with a public offering of Miller Homes. The Shareholders are excited to support Miller Homes in its next phase of growth as the Company builds upon the momentum evidenced in its recent operational and financial results.”
Miller Homes is based in Edinburgh, Scotland. Since it was founded in 1934 it has built over 100,000 homes.
The homebuilder gave no guidance on how much the IPO plan may have cost.
Stock market volatility may have put off shareholders
Shareholders must have been scared off by the recent downward trend in the FTSE, which on Thursday closed to its lowest level since December 2013.
It is believed that majority shareholder, GSO Capital Partners, as well as minor stakeholders such as the RBS and Lloyds Banking Group, backed the decision to cancel the IPO. They were likely to be more concerned about the Eurozone than the UK housebuilding market.
Miller Homes’ revenues rose from £123.3 million to £173.6 million during the January to June period, while profits increased to £19.4 million, which was more than three times the amount posted during the same period last year.
Miller Homes is the first firm to cancel an IPO in London since Fat Face and Wizzair both pulled out in the spring.
Last week, the Carlyle Group decided not to float its British automotive services company RAC Ltd because Singapore’s sovereign wealth fund made an attractive takeover bid.
