After the shocking decision of WE Soda, a cross-border payment group announced its plans to proceed with a London listing.
CAB payments is a new business that was created from the Crown Agents Bank. The company said they were “pleased” with investor interest and confirmed today their intention to go public.
Sources suggest that the company will be valued between £800m and £1billion, which would propel it into the FTSE 250 group of mid-sized listed companies.
We Soda with its headquarters in London, and large operations of soda ash in Turkey and US, shocked some in the City when it canceled a plan for a listing because it cited “extreme investor precaution in London”.
WE Soda’s owners, the Ciner Family, had hoped that they could sell at least 750 million dollars of stock, which would have valued the company at $7.5 billion, and made it an instant member of the FTSE 100.
Alasdair Warr, the chief executive of the company, spoke on BBC Radio 4 today this morning. He said that investors demanded a too large discount, and suggested the company could instead consider listing in the US.
He said that WE Soda is expanding rapidly in the US, and that if we ever reconsider returning to the market that would be a viable alternative.
It’s going to be based on the initial public offering markets in Europe, our current business situation and the balance of Europe and North America. We’ll need to assess it when the time comes.
The City is concerned that London’s appeal for companies looking to list has decreased. It was a blow to the City that Arm Holdings chose the US for its upcoming flotation.
After a series of disappointing floats in 2021, investors are now reportedly playing hardball with price. Investors are suffering heavy losses from IPOs of that vintage, including THG Deliveroo Dr Martens, and Made.com.
WE Soda’s business model was interesting and it attracted 300 investors in the first meeting. However, some investors were concerned that soda ash – a raw materials used for glassmaking and dishwasher tablet – is highly commoditised. The dominance of the Ciner Family was also a concern for governance.
The CAB announcement is the first step in the bookbuilding process, which involves negotiating with potential investors to determine how much stock each of them would be willing to purchase at different price points.
Helios Investors, CAB’s private-equity backers will be able to exit in part from the float. Amounts are not raised. The sellers have agreed to not sell more shares until at least 180 calendar days after the flotation.
Ann Cairns said, “We are pleased with investor engagement to date and look forward in further discussing our value proposition. This is based on our track record of profitable growth and cash-generative growth, which was built on a foundation of well-invested technologies, a compliance first culture, robust governance frameworks and a business that delivers economic development benefits for emerging markets.”
Barclays, J P Morgan Cazenove and WE Soda are advising CAB.
Crown Agents Bank was a financial institution serving the British Empire in 1833. It has developed a low-cost, modern platform that specialises in processing payments from and to emerging market countries.