BREAKINGVIEWS-Smelly tuna debut undercuts London IPO hype

By Karen Kwok

LONDON, Oct 31 (Reuters Breakingviews) - Britain’s big listing reform was meant to net fresh IPOs. But the $1.5 billion debut of Princes Group PRN.L, a manufacturer of tinned tuna and Napolina tomatoes, shows investors and companies aren’t biting. Despite being priced at the bottom of the range and at a discount to peers, shares of Princes slipped 1% on Friday. It adds to a fishy showing for London floats in 2025, and shows there are still holes in the government’s attempts to breathe life into the City.

Princes should have been an easy catch. The company, once owned by Japan’s Mitsubishi and now controlled by Italy-listed food and drinks group NewPrinces NWLF.MI, generates 70% of its sales in the UK. Government officials hailed it as a “Great British success story”. The group’s valuation came in at just 5 times its expected 2026 EBITDA, according to a person familiar with the listing. That’s well below local food peers such as Mr Kipling owner Premier Foods PFD.L, which trades at 7 times, per LSEG data. And yet the shares have failed to pop.

Another humdrum IPO will dent hopes that London could be due for a revival. The Financial Conduct Authority watered down governance rules such as minimum free floats in order to attract more listings. Yet 2025 has been a dire year. Only $1.8 billion has been raised in UK IPOs so far, double the volume of the same period last year, but low compared with $16.5 billion in Europe and $59.3 billion in the United States, according to Dealogic. And that haul boasts few successes. True, UK bank Shawbrook SHAW.L is up just 6% from its IPO price. But face-mask maker Beauty Tech Group TBTG.L is down 1%.

The bigger issue is a lack of domestic demand to support new floats. British pension funds, once a core buyer for UK equities, now hold just 4.4% of their assets in British stocks, down from more than 50% 25 years ago, according to think tank New Financial. Liquidity is drying up, too. The value of shares traded as a ratio of total market capitalisation on the London Stock Exchange fell to 33% in the first half of 2025, compared to 45% in Stockholm and 42% in Amsterdam, per Nasdaq data.

That all suggests Chancellor Rachel Reeves will need to do more than tinker with governance, and take more steps to boost domestic share ownership. Sweden’s success offers an example: its relatively vibrant listing market is partly thanks to a 1990s tax reform, which introduced tax-advantaged savings vehicles and encouraged retail participation. In the UK, some 360 billion pounds of cash sits idle in cash ISAs, a form of tax-free account that could be better invested in shares.

Next year may be better. Potential blockbuster floats like Visma and Navoi Mining, which could be worth 26 billion euros ($30.32 billion) and $20 billion, respectively, might boost volumes and investor confidence. What’s needed, though, is deeper reform, and a fresh catch of companies and investors to feed the pond.

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CONTEXT NEWS

Princes Group, a maker of tinned fish and cooking oil, priced its initial public offering at 475 pence per share on October 31, the bottom of the range it had indicated.

The listing gave Princes, which is majority-owned by Italy-listed food and drinks group NewPrinces, a valuation of 1.16 billion pounds, according to a company statement.

NewPrinces and Newlat Group, the family office of the NewPrinces Chair Angelo Mastrolia, acquired 254.7 million pounds of the 400 million pounds worth of shares offered.

Princes Group shares were trading at 472 pence as of 0830 GMT.