Latitude Financial formally withdraws $3.2bn IPO

Latitude Financial has finally given investors official notice that its second attempt to list on the ASX has failed.

Latitude Financial chairman Mike Tilley and new chief executive Ahmed Fahour. Picture: Stuart McEvoy.

Latitude has formally notified investors that its $3.2 billion initial public offering has been withdrawn.

The Australian’s Margin Call column reported on Tuesday afternoon that the bookbuild for the float was going down to the wire, and a decision to withdraw the IPO was taken on Tuesday night.

The move marked the second time in 12 months that Latitude had pulled out of an IPO.

Latitude offers consumer finance through services including personal loans, credit cards, car loans and retail finance and is built on the asset of the former GE Capital business, which was sold to a consortium including KKR, Varde Partners and Deutsche Bank for $8.2bn in 2015.

“Despite extensive engagement with prospective investors the board and shareholders have determined not to proceed with the offer,” Latitude Financial chairman Mike Tilley said in a statement.

“The board and shareholders were conscious of the importance of ensuring a strong after market for the company.”

Despite the setback Latitude would continue to work through its ‘Latitude 2.0’ strategy and remained a strong business, Mr Tilley said.

Latitude CEO Ahmed Fahour said described the withdrawal of the float as disappointing.

“While it is disappointing that we are not in a position to progress a public listing at this stage, we will continue to execute on the growth strategy with the support of our shareholder group,” he said.

Mr Fahour could have expected his own shareholding in the company to deliver a $45m payday had it gone ahead.

Latitude’s debut as a public company would also have been Australia’s biggest float of 2019.

Earlier in the week Latitude announced that it’s initial share pricing of $2, which was already at the low end of valuations, would be reduced to $1.78.

The Australia’s DataRoom column reported on Wednesday that Deutsche had been keen to sell its stake in the business and that it was possible that the other consortium partners may now negotiate to buy Deutsche out of the business.

Tuesday’s withdrawal from an IPO marked the second time Latitude had aborted a public listing. In October last year the company pulled an IPO valued at $4bn after weeks of speculation that it would be put on hold.