Punch shockwaves sink Ark launch

PUNCH Taverns's shock decision to pull its £2bn stock market flotation today claimed the first 'domino effect' victim as Britain's biggest privately-owned biotech group, Ark Therapeutics, dropped its £140m share offer.

Ark said it shelved next Wednesday's float as a direct result of the move by Punch. Fingers were today being pointed at Punch's adviser Merrill Lynch for pricing the pubs group too greedily and failing to communicate adequately with the market.

Punch's move sent shockwaves through the venture capital community, which has seen flotations as bringing an end to a dismal period for deals. Institutional investors were jittery after the post-float slump in shares of music retail giant HMV last week.

One private equity chief executive said: 'Investment banks are very short of fees after this long drought of deals and have hyped the initial public offering market too much, too soon.'

Doubts were instantly cast on the float plans of bookie William Hill, but spread betters were more optimistic on oil industry operator John Wood, set to hit the market in coming weeks.

William Hill, Focus Do It All and Intertek, a maker of laboratory testing equipment, all said they would press ahead with their IPOs.