Klarna, the Swedish credit provider, has revived plans for a $14bn (£10.5bn) flotation, raising hopes for Chrysalis (CHRY) which holds a 15% weighting to the global buy-now-pay-later firm.
Shares in Chrysalis, a £600m pre-flotation private equity fund, rose over 1% today on hopes yesterday’s announcement of a New York listing may pave the way for a return of capital to shareholders.
The initial public offering (IPO), called off during the market turbulence over US tariffs in April, has been priced at between $35 and $37 a share.
The company will sell 34.3m shares, 28.8m of them from existing shareholders and 5.5m shares offered by the company.
Chrysalis first invested in Klarna in 2019 when it was valued at $5.5bn before soaring to $46bn in 2021 after the surge in internet stocks during the 2020 Covid pandemic.
The collapse of this speculative bubble as interest rates and inflation rose damaged Chrysalis. Its shares tumbled from a peak of 271p and stand at 115p today on a 33% discount to net asset value.
However, the shares have recovered from a 56p low in October 2023 and have rallied 46% in the past year as the company has focused on improving shareholder returns.
Our view
James Carthew, head of investment company research at QuotedData, said: “Fingers are crossed in the hope that the Klarna IPO gets away this time. The IPO announcement has been a good predictor of market turbulence in the past. The price is lower than last time, reflecting the increased uncertainty about the US economy, we think. What CHRY will do with its stake after the IPO is a big unknown too. It may not sell it straightaway and may not even be able to if it is somehow locked in. Despite its size, Klarna is still an immature business – it is said to be looking at securing a US banking licence, for example. The CHRY managers may want to hold onto some exposure.”
