The IPO market continues to lag across the Australasia region, hitting an all-time high in the value of IPO withdrawals. 

According to a recent Thomson Reuters report the value of IPOs withdrawn or postponed by companies in the Australasia region (excluding Japan) since the start of the year is US$57.8bn, representing a 19% increase on last year’s amount.

“I think the combination of long lead times and the volatility across the markets means companies are taking more certain roads,” said Blake Dawson M&A partner Murray Wheater. “An IPO generally involves a lot of preparation, and a lot of money. The shape of the market when you begin the process can be very different to when the process is complete 18 months on,” he added.

Proposed IPOs such as Channel 7 and the Nine Network are recent examples of the recurring situation, along with Ausco, which also pulled out of an IPO in favour of a trade sale similar to Channel 7. Trade sales such as these offer companies more certainty, according to Wheater. “With an IPO you turn up at the end of the process and buyers either say yes or no. With a trade sale it’s an ongoing process and you can gage the level of interest,” he said.

Until the US economy and other markets across the globe improve Wheater says it’s unlikely there will be a dramatic improvement in the IPO market.

Top 5 IPOs withdrawn (by value) in the region since 2000