Nvidia-backed Firmus said to close books as mega IPO struggles

[HONG KONG] Australian data centre company Firmus Grid has closed the books on its struggling initial public offering as investors grew increasingly concerned that the deal could be pulled, according to people familiar with the information.

The bookbuilding closed as scheduled on Thursday (Oct 8) 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 did not immediately comment.

The Nvidia-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 reports the company had not attracted adequate support for the A$11 share price marketed to potential investors. That pricing implied a valuation of A$43.7 billion (US$30.4 billion).

The close of the bookbuilding process was moved up to Thursday from Friday after early indications from investors well in excess of the offer size, people familiar with the matter have said.

But 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 fell as much of 30 per cent in Sydney, the most on record.

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Firmus began as a Bitcoin mining operation in Australia in 2019 and has benefited from surging demand for AI infrastructure across Asia, with a pipeline of data centre projects in Australia and Singapore.

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, as part of an eight-year partnership with Nvidia.

Bank of America, JPMorgan Chase, Morgan Stanley and Morgans Financial are acting as joint lead managers on the listing. BLOOMBERG