Major Scottish construction and property firm Miller Group yesterday scrapped plans for a multi-million-pound flotation of its housebuilding division.
The move came just days after the Edinburgh-based firm announced its intention to list its Miller Homes division on the London Stock Exchange.
A successful floating was expected to raise £140 million for the group and value the newly listed company at around £450m.
However, that prospect disappeared yesterday after Miller Group issued a short statement saying it had decided to draw back from the listing plan.
“In light of the recent financial markets volatility, the shareholders of Miller Group have elected not to proceed at this time with a public offering of Miller Homes,” the company told the City.
“The shareholders are excited to support Miller Homes in its next phase of growth as the company builds upon the momentum evidenced in its recent operational and financial results.”
The proposed listing came hard on the heels of the sale by Miller of its loss-making construction business earlier in the summer.
It had been expected that cash raised from the listing of the Homes unit would be used to pay down debt and give the group the financial flexibility to pursue other opportunities.
The group yesterday gave no indication of whether it intended revisiting plans for a stock market listing in future or whether the issue was now dead.
Shore Capital analyst Robin Hardy said the float may have been shelved because Miller disagreed with investors over the valuation of the unit.
“It is a shame that Miller has pulled the initial public offering as it would have been beneficial to have new, smaller and hopefully faster-growing businesses in the sector,” Mr Hardy said.
“The reasons given for pulling the float are a little hard to accept as the market has only really been volatile for a few days and the sector’s own performance until this week has been reasonably stable.”
In August, Miller Group revealed a robust performance for the six months to June, with pre-tax profits moving strongly ahead on the back of a 40% hike in turnover to £206.9m.
The group which was established 80 years ago in the Scottish capital and is led by high-profile Scottish businessman Keith Miller completed a £160m refinancing in February 2012. The move saw investors including Blackstone Group, RBS, Lloyds, Noble Grossart and senior management take significant stakes in the business.