OPay, the SoftBank backed Nigerian payments company, has withdrawn its initial public offering on the New York Stock Exchange only hours after pricing it, citing a regulatory inquiry in a foreign jurisdiction that it has not identified. The company and its underwriters mutually agreed to terminate the underwriting agreement dated October 29, so the offering will not be completed and the shares will not begin trading as scheduled.
The deal had appeared done. OPay priced 16 million American depositary shares at $19 each, the bottom of a $19 to $21 range, raising $304 million and valuing the company at about $4 billion. Executives rang the NYSE opening bell, the Securities and Exchange Commission had declared the registration statement effective on October 29, and closing was set for November 2, with a further 2.4 million shares available to underwriters under a 30 day over allotment option. Bloomberg reported the exchange halted the stock at about 3:30 p.m. New York time with news pending and no trades executed, after indications pointed to an opening price of $16.25 to $16.75, well below the offer price.
The company’s position shifted during the day. An earlier statement described a temporary hold while it secured a formal regulatory no objection connected to the listing, a requirement it said falls outside Nigeria’s regulatory framework. The later statement went further: the inquiry concerns a jurisdiction the company calls immaterial to its core operations, it expects the matter to be resolved satisfactorily in the near future, and it says the step should not be read as reflecting on its business performance, financial condition, operational integrity or regulatory standing. Operations in Nigeria, Indonesia, Egypt and Pakistan continue normally, the company said.
Citigroup, Deutsche Bank and Standard Bank acted as joint book running managers. A concurrent private placement under which Stanbic Africa Holdings, part of Standard Bank Group, had agreed to buy up to $200 million of shares was conditional on the offering closing, so it falls away with the withdrawal. OPay filed its registration statement on October 9. Whether it returns to market will depend on the unnamed inquiry, which investors currently have no way to assess.