O1 Properties Plc, a Russian real estate investment company, is struggling to attract buyers for its $425 million initial public offering in London, said three people with knowledge of the transaction.
The company, which manages office buildings in Moscow, is offering shares at $11 to $13 each. Underwriters for the sale are due to finish taking orders at 5 p.m. in London today, said the people, who declined to be identified because the process is private. A failure of the sale would make 01 Properties the first London IPO to be pulled this year.
“The current markets are not particularly good, people are scared at the moment,” said Alexei Yazikov, head of research at Aton LLC in Moscow. “They have a pretty good collection of assets, but it’s also about price: if it’s attractive for people, they will go for it.”
O1 Properties is seeking to conduct an IPO at a time when Russia’s Micex Index has tumbled 14 percent since its high this year in March, as investors drop riskier assets and Europe’s debt crisis intensifies. The U.K. benchmark FTSE 100 Index was little changed today, after closing yesterday at the lowest level since December.
At $425 million, O1 Properties’s IPO would be the biggest from a Russian company since at least October, according to data compiled by Bloomberg.
O1 Properties owns and manages a portfolio of eight completed office buildings in Moscow’s prime business area, it said in an April 18 statement. Its portfolio was valued at about $2.1 billion at the end of last year, according to the statement.
Morgan Stanley (MS:US) and VTB Capital Plc are joint global coordinators for the issue, alongside joint bookrunner UBS AG (UBSN) and co-lead manager UniCredit SpA. (UCG)
A representative of O1 Properties declined to comment.
To contact the reporters on this story: Zijing Wu in London at firstname.lastname@example.org; Alexis Xydias in London at email@example.com
To contact the editor responsible for this story: Jacqueline Simmons at firstname.lastname@example.org