Monday's flotation threatened

The already delayed sell-off of PwC’s consulting business could face a further setback because the dwindling IPO market has suffered a further drop in confidence following the WorldCom scandal.

In May the world’s largest audit firm PwC confirmed plans for the long-awaited IPO of PwC Consulting, 17 months after a $18bn (£11.74m) deal to sell the division to Hewlett Packard collapsed.

But investment experts say the already struggling US IPO market could now come to a near standstill because of WorldCom.

Khuram Chaudhry, European equity strategist at Merril Lynch, said that accountancy related stocks faced ‘increased risk’ as all financial business faced intensified scrutiny.

‘Investors will be looking at the fundamentals,’ he said, asking whether they could get a discount on the stock at a later time. But he added stocks could still sell if the price was pitched correctly.

Stephen Bourne, head of corporate finance at BDO Stoy Hayward, said: ‘It would be very difficult in the current market for flotations of accountancy firms’ consulting arms. There’s so much doubt about the future of the profession.’

PwC has filed a registration statement with the US Securities and Exchange Commission to float the company on the New York Stock Exchange under the name of PwCC Limited. The business will be called Monday once the flotation is completed.

So far, no details have been released about the number of shares to be offered or at what price. Industry commentators expect the offer price to be valued at much less than the figure HP had intended to pay for it.

PwC said it could not comment due to a ‘quiet period’ imposed by the Securities and Exchange Commission ahead of the flotation.