UK video-on-demand operation filmgroup, the parent of theatrical distributor Redbus Film Distribution, has cancelled its float, the company confirmed on Wednesday.
CEO Simon Franks cited market conditions for pulling the planned flotation on the London Stock Exchange on June 14.
Filmgroup had already slashed how much it aimed to raise from the float. The company, backed by Internet guru Cliff Stanford, was to raise about £75m, valuing the operation at about £260m.
The company's research and development activities are understood not to be affected by the cancellation since filmgroup has previously said that is has developed the technology necessary to broadcast films on the Internet at high enough quality. But the roll-out of the service looks more likely to affected by the move.
Filmgroup is understood to have structured at least some of its deals for VoD and theatrical rights to films on the basis of equity in the company based on the float. Intertainment, which recently struck a deal for about 75 films with filmgroup, has options for up to 20% of the operation. A deal with a US partner which involved equity in the company also faces uncertainty.
But filmgroup may well still preserve the deals, many of which are understood to require only an initial payment. In a statement, filmgroup said it may float later, following further developments within the business.
Franks said: "We are continuing to develop our product and I am pleased to say that the increased profile we have attracted during this marketing process has presented a number of interesting and exciting business opportunities."
Filmgroup's decision follows that of Yes TV, which ditched flotation plans last month.