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Leonardo, one of Europe’s largest defence groups, has delayed the US listing of its American military electronics arm because of “adverse†market conditions.
The Italian group’s move sent shares 6 per cent lower to €6.85 by late morning trade in Milan after a lack of investor demand prevented an “adequate†valuation of DRS, its US subsidiary.
Leonardo, which is aiming to build a war chest to help drive European consolidation, had planned to list a minority stake in DRS on the New York Stock Exchange.
Analysts had estimated the group, which acquired the US unit in 2008 for $5.2bn, would sell between 20 and 30 per cent of its subsidiary for at least $3bn.
The Rome-based company said it will revisit the possibility of an initial public offering once conditions become “more favourableâ€.
The postponement comes just over a week after it had launched its offering of nearly 32m common shares for a proposed price range of $20 to $22 a share.
It had hired Goldman Sachs, Bank of America Securities and JPMorgan as lead bookrunners.
DRS relies on the US Department of Defense for 84 per cent of its revenue, which last year came in at $2.8bn, with operating profits of $181m.
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