Europ@web flotation called off

Market conditions have scrapped Bernard Arnault's plans for flotation of his Internet investment fund Europ@web -- at least for now.

The long-awaited flotation was expected to go forward in July, but this week Europ@web said in a statement that it was not to be:

"Following certain recent discussions regarding strategic alternatives involving Europ@web, its wholly-owned Internet operating company, Groupe Arnault, has today informed the COB [Commission des Operations de Bourse] that it will not be proceeding with the initial public offering of Europ@web before the summer." The COB is France's market regulatory agency.

The move comes amid growing caution from investors about throwing money at dot-com companies; however, Europ@web insists it isn't in need of funds from the public markets to keep in business.

"Europ@web's current capital structure, together with the support of Groupe Arnault, provides it with ample capital to continue its operations, including investments in new companies, for the foreseeable future," the group stated.

Market analysts said the group is simply rolling with the punches. "It is clear the time isn't right [for a flotation]," said one analyst. "A few months ago we were seeing rates of oversubscription -- more buyers than available shares -- of around 40 or 50. At the moment it's closer to two or three."

Another factor that might urge investors to caution: the lack of a track record for Europ@web and others -- that's to say, concrete evidence that they will get a return on their investment. "This just adds to the atmosphere of uncertainty," the analyst said.

The effects of that uncertainty are hard to miss. For example, take CMGI, a Europ@web-like Internet incubator based in the US that controls such companies as Lycos and AltaVista. The Nasdaq-quoted company is trading near its lowest levels since the beginning of the year, a drop of around 54 percent since the beginning of April.

Many of the 40 companies in which Europ@web holds stakes have found themselves in a similar quandary. For example, LibertySurf is down 52.8 percent from its high at the beginning of March, Netvalue is down 74.7 percent from its high and Artprice is off 58.9 percent.

LVMH, the luxury conglomerate chaired by Arnault, was one of the investors in failed e-commerce site Boo.com.

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