Global IPO volumes rose 64 per cent last year - according to the EY Global IPO Trends report - but have slowed due to geopolitical tensions. There were 240 listings on the ASX in 2021 and $13 billion in capital raised, according to data from the stock exchange. It was the highest since 2007 but most of these underperformed, another factor which has reduced investor appetite.

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There have been 32 IPOs on the ASX so far this year, but the amount of capital raised is much less than what Foxtel needs. Chemicals supplier and distributor Redox and carbon trading platform Xpansiv commenced roadshows in March to see if they could launch on the ASX. Foxtel sources said that if either of these companies enthuse investors, there is a chance to list later this year.

Foxtel has attempted to list publicly multiple times since 2016. Under the initial version of the IPO plans, News Corp would have maintained 51 per cent stake in the company, while Telstra would have sold down to about 20 per cent, leaving 30 per cent for new investors.

The initial plans were delayed as declines in Foxtel’s traditional cable subscriber base accelerated, forcing the company to shift focus to aggressive cost-cutting and a push into streaming through Kayo and drama-focused service Binge.

Plans for a potential float were revived just as News Corp received an unsolicited US$2 billion offer from a US special purpose acquisition vehicle owned by US cable TV veteran Leo Hindery. The offer was made after News Corp wrote down the value of Foxtel by $1.4 billion to $1.3 billion in May 2020.

The company conducted a feasibility study last year before launching an inaugural investor day to show how Foxtel has moved away from a declining cable TV business to a growing streaming company. An IPO would have allowed Foxtel to pay down the significant amount of debt it owes to banks and its two shareholders (almost $2 billion as of December 31).

Foxtel has 3.9 million paid subscribers as of December 31, but its revenue fell 3 per cent to US$498 million ($698 million) in the December quarter. Earnings [before interest, tax, depreciation and amortisation] for the subscription video segment fell 31 per cent to US$86 million as discount offers were used to boost uptake and many customers opted for lower-cost streaming instead of traditional pay TV.

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