AS Watson considers delaying London IPO to next year

Traders Union
All News
Financial News
AS Watson delays London IPO

Highlights

AS Watson is considering delaying its London IPO to 2025 due to regulatory complications in Asia and ongoing market volatility.
Singapore's Temasek may face a postponed exit from its nearly 25% AS Watson stake, acquired for close to $6 billion in 2014.
A high-profile IPO delay would exacerbate concerns over London's equity market, which has seen only seven listings worth £2.2 billion in 2024 so far.

Listing timetable faces Asian hurdles

As reported by the Financial Times, AS Watson is now considering pushing its flotation into next year after previously planning to proceed despite market volatility linked to the war in the Middle East. People familiar with the matter say the company faces possible regulatory and other complications in Asia that could delay the process.

AS Watson, part of CK Hutchison, is best known in the UK for Superdrug, but it operates 17,000 stores across 12 retail brands in 31 markets, including Rossmann in Germany. The IPO is also seen as a route for Temasek, Singapore's state-owned investment manager, to exit the nearly 25% stake it bought for close to $6 billion in 2014, according to people close to the situation.

The group is also pursuing asset sales alongside the planned listing. Its parent disclosed in a filing at the start of the month that AS Watson is exploring a sale of French perfumer Marionnaud, and people familiar with Hong Kong's listing rules warn that such a move could amount to a material change requiring the company to refile listing documents.

Pressure builds on UK listings market

A delay to such a high-profile transaction would add to concerns over the strength of London's equity market, which continues to struggle to attract new issuers while foreign takeovers reduce the pool of listed companies. UK market participants have been expecting a pickup in IPO activity this year after a prolonged drought, but several deals remain on hold.

Companies including software group Visma, valued at 19 billion euros, have delayed listing plans, extending a broader slowdown that leaves London with just seven listings worth a combined 2.2 billion pounds so far this year. Airtel Africa is one of the few groups still signaling activity, as it hires more bankers for a possible London flotation of its $10 billion mobile money business as soon as the second half of this year.

The possible AS Watson delay also comes as CK Hutchison holds tens of billions of dollars in cash following sales of UK assets including UK Power Networks and Eversholt Rail. The Financial Times reported earlier this year that Jardines had held talks with CK over a possible acquisition of supermarket chain ParknShop, another AS Watson business, although a CK executive later denied a deal was under consideration.

In our earlier report on Railpen’s sweetened takeover approach for IP Group, we explained how the pension fund manager raised the cash component of its offer and proposed distributing IP Group’s Oxford Nanopore Technologies stake to shareholders. We also noted the deal’s added contingent value right tied to potential gains in IP Group’s Metsera holding, highlighting continued takeover pressure in the UK market after IP Group previously rejected an initial proposal.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.