LeasePlan cancels IPO (update)
LeasePlan has decided not to proceed with its Initial Public Offering, announced at the end of last week. The company cited “market conditions” as the reason for its decision.
Experts familiar with the IPO point to a considerable margin between the company's own valuation, at around €7.5 billion, and what the market seems prepared to offer for it.
To a large extent, the reason for this lies with the market rather than LeasePlan itself. Despite its all-electric ambitions, LeasePlan at present still manages a large number of diesel vehicles. Residual values for diesels have been in a downward spiral for many months, and will probably continue to decline. Turbulence in Turkey and the tough competitive environment in the U.S. are further burdens on LeasePlan's current valuation.
So it seems that LeasePlan's IPO – which had been in the cards for a long time – is a case of unfortunate timing. Sources familiar with the company say that it remains likely that LeasePlan will go through with its IPO, but at a later date, and possibly at a lower valuation.
Here is more info on LeasePlan's initial decision to go public.