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GREENWICH, Conn. (AP) — Shares of Blyth Inc. tumbled more than 20 percent after the opening bell, after the company's ViSalus subsidiary withdrew its initial public offering, citing uncertain market conditions.
ViSalus, Blyth's weight-loss, energy-drink and nutritional-supplement business, said that while its sales have more than quadrupled in the first half of this year, its management believes that the current market won't value the company fairly if its goes public now.
"We have complete confidence in our long-term growth prospects, and we have the team on board to achieve our goals," ViSalus CEO Ryan Blair said in a statement.
Blyth said in August it would spin off ViSalus through an initial public offering worth up to $175 million.
The Greenwich, Conn.-based company also sells home accessories, including candles under the Cape Cod and Colonial brand names, and home fragrances. It sells through several websites, the Miles Kimball catalog, and a direct selling arm that operates PartyLite house parties. It also owns the Sterno brand of fuel, used for tabletop heating.
Some industry observers weren't sure that the spinoff was in the best interest of the overall company and its shareholders. Last week, Moody's Investors Service lowered its outlook on Blyth to "negative" from "stable," citing concerns about the IPO.
Moody's said at the time that Blyth's core candle and home fragrance business is struggling and will likely continue to do so in this economy. The company may suffer after a spinoff as the weight loss business, which has grown rapidly, helps offset that weakness. Additionally, Blyth already has a tight cash position that could be worsened by the split, Moody's said.
In morning trading, Blyth shares fell $5.95, or 18.3 percent, to $26.62, after dropping as low as $25.16 after the market open.