Simon English: Binmen's realistic price could make you pity bankers — almost

The banker calls in his traders. “It’s hit-the-phone-like-it-owes-you-money time, boys. If you’ve ever done anyone a favour, call it in. Ring your clients day and night until they a) buy, or b) die. This float is priced to go. Let’s put some lipstick on this pig.”

Perhaps that’s not quite how the conversation went in the offices of Citi, JPMorgan, HSBC, Peel Hunt and Rothschild last week as the assorted advisers realised that a mooted float price for Biffa of 270p was fantasy. But that was the gist.

And, in fairness to Biffa, it is no pig, be-lipsticked or otherwise.

As a waste-management firm — don’t call them binmen — it ought to do well no matter what the economic weather.

We’ll all keep producing rubbish at roughly the same rate and are increasingly willing to pay extra to see it disposed of in eco-friendly ways.

What today’s much lower float price shows is just how much politicians can influence market sentiment even, perhaps especially, when they don’t mean to.

Theresa May’s surprisingly fierce remarks at party conference about the need for a hard Brexit spooked fund managers, who quickly decided the world was an unmeasurable place.

Blue-chip investors told the bankers they still liked Biffa as a business, but that it suddenly looked a lot harder to value.

The bankers perhaps advised the client that they could float now at a much lower price, or wait three years before they could try again.

To Biffa’s credit, it was realistic rather than greedy and decided to get onto the market while it could and worry about the share price later.

As for the bankers, if they sometimes resemble jumped-up-bookies changing horse-racing odds in light of torrential rain, or estate agents over-promising huge sales prices in order to land business, well that’s just an unfortunate coincidence.

In these circumstances you could almost feel sorry for them, almost get the idea that lately they are earning their fees. I did say almost.

Cost management is the buzz phrase. Today Pearson said that’s how it will hit profit targets despite falling sales.