The bookbuilding closed as scheduled Thursday morning in Australia, without clear indication of the price or the deal structure, said the people, who asked not to be identified because the deal is private. A representative for Firmus didn’t respond to a request for comment.
The Nvidia Corp.-backed firm was looking to raise US$5.5 billion, including a greenshoe option, in one of Australia’s largest-ever IPOs. The bookbuilding process closed amid mounting concern that the company had not attracted adequate support for the A$11 share price marketed to potential investors, some of the people said. That pricing implied a valuation of A$43.7 billion (US$30.4 billion).
Companies along the artificial intelligence supply chain have led a massive wave of fundraising, which has boosted IPO markets from the US to Hong Kong and China. But sentiment has recently wobbled as some investors questioned the pace of borrowing and spending, with companies still lining up to raise funds. Firmus peers with potential multibillion-dollar deals in the pipeline include Singapore-based DayOne Data Centers Ltd and London-headquartered Nscale Ltd.
Firmus moved up the close of the bookbuilding process to Thursday from Friday after early indications of demand in excess of the offer size, people familiar with the matter have said. As the deal progressed, some potential investors turned more cautious as they worry about existing shareholders potentially flooding the market soon after the company’s debut, people familiar with the matter have said. The overhang added to concerns over what some investors see as an aggressive pricing strategy, they said.
“I’ve never seen an IPO so polarising,” Jun Bei Liu, co-founder and lead portfolio manager at Ten Cap Investment, said on Bloomberg TV. “There was a lot of international investor interest, however, when it comes to the crunch, the demand seems like it isn’t there when they were asked to put up the capital that’s required.”
In a sign of the mounting concern, shares of Firmus backer Maas Group Holdings Ltd fell as much as 30% in Sydney, the most on record. Maas Group noted that there has been “significant market speculation and commentary” on whether the proposed IPO will be proceeding. The company is not aware of any undisclosed information that would explain the recent trading, it added.
The listing was on track to be one of the largest-ever listings in Australia, on par with Medibank Pvt’s offering in 2014, which raised just a hair under US$5 billion, according to data compiled by Bloomberg. That would be a welcome boost to the country’s primary market, where proceeds this year are just over US$1 billion, after surpassing US$2 billion in each of the previous two years.
Firmus began as a Bitcoin mining operation in Australia in 2019 and has benefitted from surging demand for AI infrastructure across Asia, with a pipeline of data centre projects in Australia and Singapore.
The company has inked a number of large deals with high-profile clients as it seeks to capitalise on artificial intelligence demand. It secured US$2 billion in commitments from investors including Nvidia and Blackstone Group. Other existing shareholders include Jane Street, while Firmus also raised US$505 million in a Coatue Management LLC-led funding round in April.
Proceeds from the listing would fund purchases of graphics processing units for its first data centre project in Batam, Indonesia, being developed with DayOne Data Centers Ltd, as part of an eight-year partnership with Nvidia.
Bank of America Corp, JPMorgan Chase & Co, Morgan Stanley and Morgans Financial Ltd are acting as joint lead managers on the listing.
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