Cash America Withdraws Planned Enova Spinoff

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Cash America(CSH) has withdrawn plans to conduct an IPO of the majority of its Enova International unit.  The company had announced last September that it intended to offer a majority of the unit to investors, but retain a 35% to 49% stake.  Cash America shareholders would not have received shares in the new firm.  Cash America would have used the proceeds to pay down debt.

The company blamed the decision to withdraw the offering on the volatile IPO market:

Commenting on the withdrawal of Enova’s Registration Statement, Daniel R. Feehan, President and Chief Executive Officer of Cash America said, “While it is disappointing that the volatility in the IPO market did not provide us with the window of opportunity we desired to launch the Enova IPO, our Board is very happy continuing to operate Enova as a wholly-owned subsidiary of Cash America. Enova, which comprises our e-commerce segment, continues to grow at very impressive rates as it expands internationally and deploys innovative new consumer credit products in the U.S. We continue to believe this business has an exciting future.”

At the same time, weakness in the core business, regulatory uncertainty, and inadequate interest in the spin appear to be more likely causes.

Disclosure: The author holds no position in any stock mentioned

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