Market turbulence forces RHM to delay £1.5bn float
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Your support makes all the difference.RHM, the baking and milling group behind Hovis bread and Mr Kipling cakes, has shelved plans for a stockmarket flotation that could have valued the company at up to £1.5bn.
The group, formerly Ranks Hovis McDougall, had hoped to seek a listing this autumn but the roller-coaster nature of equity markets has put those plans on hold until at least next summer.
While RHM never formally announced its intention to float, it confirmed in June that its owner, the venture capitalists Doughty Hanson, was looking at the possibility.
A spokesperson for RHM said "sometime next year is the earliest" that the group expected to revive its plans. "[A flotation] is not likely in the first half," he added.
In the event of a flotation, John Nelson, the deputy chairman of Kingfisher and former European chairman of Credit Suisse First Boston, the investment bank, has agreed to chair the group, which is run by Paul Wilkinson.
Volatile stockmarkets around the world have closed the doors to new issues since the summer. Banking sources do not expect an improvement until the second half of next year at the earliest.
Among the companies that were forced to pull their listings in the wake of corporate disasters such as WorldCom were Yell, the directories group, Focus Wickes, the do-it-yourself retailer, and C&C, the Irish drinks group formerly known as Cantrell & Cochrane. Burberry, the luxury goods group owned by GUS, was the last major flotation to succeed in July – although less than a quarter of the equity was sold.
RHM, which owns a stable of household names including Bisto gravy and Paxo stuffing, has not been independently quoted since 1992, when Tomkins bought it for £935m. It was acquired by its present owners in 2000 for £1.2bn.
Doughty Hanson declined to comment on its intentions for the food group.
Producing more than 1 million tonnes of flour a year in 11 mills throughout the UK, Rank Hovis is the UK's leading flour miller. The business traces its origins back to 1885.
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