Singapore sovereign wealth fund GIC seems out of sync with market sentiment.
A travel group, which seemed a good buy to GIC, failed to attract other investors.
The initial public offering for Travelport was cancelled on Wednesday, reports the Independent, owing to uncertain market conditions.
The target range of 210-290 pence ($3.27 to $4.52) a share valued the U.S. group between $3.05 billion and $3.45 billion, reports the Wall Street Journal.
Government of Singapore Investment Corporation (GIC) had committed to buy a 7% stake for $225 million, setting a floor for other investors, it adds.
But others weren't buying even after prices fell, says the Independent. It's a blow for Travelport's private-equity owner, Blackstone Group, says the Journal.
The news comes just after GIC suffered a paper loss of about 7.85 billion Swiss francs (around $7.26 billion), converting notes into shares that would give it a 6.6 per cent stake in UBS, making it the biggest shareholder of the Swiss bank, according to the Straits Times.
The Independent says:
Blackstone had hoped to raise as much as £1.2 billion from the group's sale, which would have registered as London's biggest IPO for more than two years.
Pricing on the deal, which was arranged by investment banks Barclays Capital, Credit Suisse, Citigroup, Deutsche Bank and UBS, was thought to have dropped late on Wednesday as investors told the banks that the original 210p to 290p-a-share range would not be met. Reports suggested said that the price had fallen to as low as 180p, but even the discount was not enough to persuade investors of the deal's value. The company denied it had agreed to any price lower than initial guidance.
Travelport's chief executive, Jeff Clarke, blamed increasingly unstable market conditions for the decision to cancel the sale. "Since we announced our intention to float, there has been significantly increased volatility and uncertainty in the global equity markets, as a result of macro circumstances unrelated to our business," he said.
While the travel-bookings group blames market instability, investors also seem to have been spooked by its high leverage and poor earnings visibility, says the Journal.
UBS was also in trouble when GIC pumped billions into the Swiss bank.
GIC invested 11 billion Swiss francs in UBS, says the Straits Times. Now GIC's UBS shares are worth just 3.15 billion Swiss francs, it adds.
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