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UK’s Fitness First​ Delays Singapore IPO Due To Volatile Market

Contributed by Shares Investment

By Dow Jones Newswires  

U.K.’s health chain operator Fitness First has postponed its anticipated US$500 million initial public offering in Singapore, making it the latest company to fall victim to the current volatile market conditions, people familiar with the situation said.

The company had planned its Singapore listing during the fourth quarter of this year, the people said Saturday. One of the people said that Fitness First may now look to tap the market next year, but the timing hasn’t been decided.

Its decision comes as other firms consider delaying or have pushed back plans for a Singapore listing due to unfavorable market conditions, stirred by souring risk sentiment over slowing global demand and Europe’s sovereign debt crisis.

These companies include U.K. soccer club Manchester United​ Ltd. and Indian hospital operator Fortis Healthcare (India) Ltd. According to people familiar with those plans, Manchester United is mulling a postponement of its planned US$1 billion IPO to next year, while Fortis has decided upon a similar delay for its US$400 million float.

Elsewhere, the IPO rout has also affected Chinese companies. Sinohydro Group Ltd late last month cut the size of its China IPO to US$2.26 billion from an estimated US$2.7 billion, while two construction machinery companies, Sany Heavy Industry Co. and XCMG Construction Machinery Co., postponed a total of US$4.5 billion in Hong Kong IPOs slated for September.

Meanwhile, even companies that successfully tapped capital markets in the current climate have had to lower fund-raising expectations and suffer tanking share prices.

Chinese auto maker Great Wall Motor Co fell sharply on its first day of trading Wednesday, after selling shares offered in its CNY3.96 billion ($620 million) Shanghai IPO at CNY13.00 each, at the bottom of its indicative range of CNY13.00-CNY14.00 a unit. Also late last month, Citic Securities Co priced shares in its US$1.7 billion Hong Kong float near the low-end of the indicative range.

Fitness First is owned by London-based buyout firm BC Partners​, which bought the business for EUR1.2 billion in 2005, and would be the latest foreign firm to list in Singapore after Hutchison Port Holdings Trust raised US$5.4 billion last month in the city-state’s largest IPO ever.

Fitness First had originally planned to commence investor roadshows mid-September, having received Singapore Exchange’s approval for the listing in August, one of the people said.

The company has already met with cornerstone investors in Hong Kong and Singapore, one of the people said.

On its website, the gym operator says it has more than 490 clubs and 1.3 million members in 18 countries. Over the past year, the group has disposed off all its outlets in France, Italy, Spain and Benelux nations as it seeks to focus on emerging markets, especially those in Asia.

Its planned Singapore listing includes its outlets located in Australia, Hong Kong and Singapore.