🥴 CAB flopped

Good morning. In today’s update - one of the year’s biggest IPOs flopped on its debut, data firm YouGov announced its biggest ever deal, housebuilding activity slumped further and Worldpay changed hands at a $18.5bn valuation.

Markets

• Bad day for London markets on Thursday as investors priced in the likelihood of further US rate hikes and digested poor construction data in the UK.

  • The FTSE 100 (-2.2%) and FTSE 250 (-2.6%) both suffered heavy losses.

• Notably, Currys sank 9.7% after delivering a downbeat outlook, whilst Ocado (-3.5%) dropped after a downgrade from analysts at Morgan Stanley.

Corporate News

Net fees at UK recruiter Robert Walters dropped 10% over the last quarter, driven by economic uncertainty and an easing in demand for tech staff; gross profits fell to £100m (from £112m in the same period last year), with UK-specific fees down 21% to £16m. (Link, RW)

Currys shares nosedived today after warning markets of another tough year ahead and choosing not to declare a dividend; revenue at the electrical goods retailer fell 7% on a like-for-like basis across the last year, with CEO Alex Baldock admitting the company was “wary” of optimism about consumer spending. (Link, Currys)

Shopping TV channel Ideal World announced that administrators had taken over the company after falling into difficulties amid a changing consumer landscape - 275 employees will be made redundant. (Link)

Deals

Stinker for London’s equity markets - the long-awaited IPO of CAB Payments, one of the biggest of the year so far, ended in disappointment after shares dropped by 10% on the first day; the fintech raised around £300m as part of the listing and started trading with a market cap of £850m. (Link)

YouGov is set to announce the £300m acquisition of GfK’s global consumer panels division, after the unit was put up for sale following the merger between its parent and NielsemIQ; YouGov is expected to tap shareholders to help fund the deal. (Link)

UK hedge fund Man Group agreed to acquire a majority stake in Varagon Capital Partners - a US-based private credit firm - for $183m in cash; The FTSE 250 firm said Varagon - who has around $12bn in assets under management - would provide it with “significant institutional credibility” for its push into US private credit. (Link)

Scottish broadcaster STV scored a deal to acquire production firm Greenbird Media for £24m; CEO Simon Pitts said the deal was a “major step” in becoming the UK’s top nations and regions production company. (Link)

Economy / General

Excluding two months during the first lockdown, UK housebuilding slumped to its lowest level since 2009 in June as surging interest rates and a subdued outlook on the housing market dampened demand; S&P called the move a “steep and accelerated” downturn, with their index of residential building falling from 42.7 to 39.6 (below 50 signals contraction). (Link, S&P)

The market’s view on peak UK interest rates has risen dramatically over the last week, with traders now expecting rates to hit 6.5% by March 2024 - up from as low as 5% in just May. (FT)

🌎 Global Snapshot

News

Financial technology group FIS agreed the sale of a majority stake in Worldpay to private equity group GTCR, valuing the business at $18.5bn; FIS will retain a 45% stake in the company and plans to use the $11.7bn proceeds to pay down debt and fund share buybacks. (Link)

It’s not just the London IPO markets that are drying up - US venture capital investments dipped by almost a third year-on-year in the second quarter of 2023; the number of investments hit just over 3k during the period, whilst capital deployed fared even worse - down around 50% to $40bn. (Link)

Twitter has reportedly accused Instagram of “systematic” and “unlawful misappropriation” of trade secrets relating to its rival app Threads; the app has racked up over 30m users in its first day, according to Zuckerberg. (Link)

Markets

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