Corestate cancels IPO due to 'difficult market environment'

Swiss asset manager Corestate has cancelled its €150 mln IPO less than a month after unveiling plans to list its shares on Frankfurt stock exchange.

Zug-based Corestate said the listing of its Luxembourg-based unit Corestate Capital Holding will no longer take place.

'The currently difficult market environment for IPOs in the German and UK stock markets, which are of particular relevance to the Company, has led the company and the principal shareholders to cancel the IPO,' Corestate said in a statement.

Sascha Wilhelm, CEO of Corestate, noted that the market environment for small and mid-cap IPOs has deteriorated considerably over the past few weeks. 'The appeal of our business model is increasing and we will fully reach our growth targets also in 2015. Accordingly, there is no reason on the part of shareholders and the Company to deviate from our current expansion plans for 2016,' he noted.

Corestate said last month that it intended to issue €100 mln of new shares from a capital increase as well as to offer shares held by existing shareholders to allow for a free float of over 50% after the IPO.

Currently around 70.9% of the share capital is held by the company's two founders, Ralph Winter (64.2%) and Thomas Landschreiber (6.7%). Swiss-listed firm Intershop Holding is also a core shareholder with a 28.1% interest.

The shares were to be offered in a public placement in Germany and in a private placement to institutional investors in certain jurisdictions outside of Germany and outside of the US.

Corestate intended to use the proceeds from the capital increase to increase the number of transactions and to execute higher-volume deals, allowing the company to offer investment products for institutional clients.

The company currently manages around €1.4 bn of assets, including developments.

Italy
This is not the first property IPO in Europe not to run according to plan in 2015. Italian real estate manager Sorgente pulled the plug on its plan to list on Milan’s Stock Exchange in October, citing ‘insufficient demand’. Initially, the group intended to issue a total of 134 million shares at a price of €3 each, giving the company an initial market cap of €440 mln.

The news marked Sorgente’s second failed attempt to float: it cancelled an IPO scheduled for November last year, blaming 'volatility in financial markets'. The announcement could also spell bad news for asset managers Idea Real Estate and Coima, which have both said that they plan to float in upcoming months.