UK Edition
Britain's biggest debt collector Cabot joins UK IPO rush with £1bn listing
The UK's biggest debt collector Cabot plans to go public with a £1bn listing in London next month, joining the queue of companies eager to float as the City's initial public offering (IPO) market roars back to life.
The Kent-based business, which is owned by JC Flowers and Encore Capital Group, said on Friday that it planned to raise £195m for "general corporate purposes" in a move that will see it begin trading next month at an expected value of around £1bn.
Its announcement to float comes weeks after former Provident Financial boss Peter Crook resigned from the group's board - an exit that delayed the IPO process, sources told Reuters.
Mr Crook left Provident after more than a decade at the helm amid major problems at the Bradford-based doorstop lender. Soon after he left Cabot's board, the chairman of British lender Wonga Andy Haste was appointed as Cabot's chairman-elect.
"At a time when there is an increased focus on consumer credit, Cabot continues to lead the industry as it works to identify affordable solutions," Mr Haste said.
The group's IPO coincides with rising concerns over consumer debt, with the Bank of England warning last month that the UK's growing £200bn consumer debt pile threatens to damage the capital positions of some of Britain's biggest banks.
Cabot joins a rush of London floats, with the UK's biggest hummus maker Bakkavor among the latest to unveil UK listing plans - doing so shortly after TI Fluid Systems, Dutch finance group TMF and Russian power producer and metals company En+ unveiled large London IPOs.
"The underlying equity markets are possibly the most constructive that we have seen in 10 years," Nicholas Hall, JP Morgan's head of UK equity capital markets, told The Telegraph last week.
While the recent flurry of deals marks a huge turnaround on last year - by the second week of October a year ago there had been around $2.5bn worth of IPO deals in London, 65pc less than this year's $7.2bn, according to Dealogic - the uncertain political climate has left many cautious.
"It’s greed or fear, and people aren’t allowing themselves to go into unbridled greed because the fear is always underlying," said Daniel Winterfeldt, a partner at Reed Smith. "There’re so many uncertainties in today’s world that those long, open periods of great deals and great returns might be over for the foreseeable future."