College Hill managed IPO gives market hope

The announcement of one of the first major initial public offerings (IPOs) of the year and a further raft of companies raising cash in the equity markets suggest a recovery could be under way for project based financial PR.

Sings of life: city hopes for second half recovery
Sings of life: city hopes for second half recovery

Next week College Hill will manage the financial PR for the IPO of property investment company Max Property Group.

The deal is high profile for an AIM listing, not just because the company is run by charismatic entrepreneur Nick Leslau, who has appeared on Channel 4's Secret Millionaire programme, but also because the £150-£200m it hopes to raise represents one of London's few genuine IPOs of 2009.

The company aims to take advantage of the distressed real estate market and has reportedly been met with a favourable response from institutional investors.

Alex Sandberg, chairman of College Hill, said there were ‘very early signs of the market twitching into life', but warned that talk of a recovery may be premature. ‘The damage that has been inflicted on the financial markets is pretty significant,' he said.

With banks yet to loosen their corporate lending criteria, the equity markets have become one of the only realistic sources of new capital. A cross-section of financial PR bosses spoken to by PRWeek remained cautious about IPO flow - particularly given the traditional lull in the summer months - but most now had realistic expectations of deals in the autumn rather than waiting until 2010.

The recovery of the equity markets has already had an impact on business. UK fundraisings have rocketed to £18.8bn so far this year - more than the same period for the past 13 years combined, according to Dealogic.

The flow of rights issues shows little sign of abating - this week saw Travis Perkins, the builder's merchant, seeking £300m using Square 1 Consulting for its financial PR and platinum producer Lonmin raising £300m with Cardew Group on board.

These come on top of last week's bumper rights issues from private equity firm 3i, which raised £732m using Maitland, and Finsbury advised builder Taylor Wimpey, which raised £510m.

David Bick, chairman, Square 1 Consulting, said the Travis Perkins' rights issue success showed investor appetite was there, but differentiation would be made between strong companies seeking to boost balance sheets and those needing a crisis cash injection.

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