(Reuters) - Private equity giant KKR & Co KKR.N and its partners canceled what was to be Australia's biggest listing of the year, lender Latitude Financial, because investors would not pay a price that reflected its value, the Latitude CEO said on Wednesday.

FILE PHOTO: The KKR & Co name is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., August 23, 2018. REUTERS/Brendan McDermid/File Photo

In what was to be their second attempt at listing in just over a year, KKR, Deutsche Bank DBKGn.DE and Varde Partners pulled the expected A$1 billion ($676.20 million) offering late on Tuesday, according to sources, even after finding buyers for all its shares.

In an email to Latitude staff on Wednesday, reviewed by Reuters, Latitude Chief Executive Officer Ahmed Fahour confirmed the Initial Public Offering was canceled but said the company would continue as a private enterprise.

“Feedback from investors has been overwhelmingly positive and although demand has been strong, some investors have not been prepared to offer a price per share that reflects a fair value given the strength and performance of our business,” Fahour wrote in the email.

“For this reason our shareholders have decided not to proceed with the listing process at this time, a decision that’s in the interests of our business, our people, our customers and partners,” Fahour added.

A Latitude spokesman told Reuters the email was authentic.

Speaking on behalf of the company’s three major shareholders, Chairman Mike Tiley confirmed the decision and said the board of directors were concerned about the performance of the shares.

On Tuesday, Reuters reported the decision had been made because a large proportion of demand for shares was coming from hedge funds rather than desired long-term investors, and therefore the owners did not want to risk “an adverse after-market outcome”.

“Despite extensive engagement with prospective investors the Board and shareholders have determined not to proceed with the offer,” Tiley said in an emailed statement.

“The Board and shareholders were conscious of the importance of ensuring a strong after market for the company.”

Latitude had filed a prospectus with the regulator last month valuing the company at between A$2 and A$2.25 per share but over the weekend decided to discount the offer price by as much as 20.9% due to low demand, Reuters reported.

That would have valued the company at about A$3.1 billion.

But even after the discount, investors and analysts remained cautious about the risks facing the company, including the potential for rising bad debts and high competition in the digital and installment payment sector, where Latitude wants to grow.

The company, which offers easy-access loans and credit cards with minimal paperwork, and its bookrunners were due to finalize the raising on Wednesday and shares in the new company were due to begin trading Oct. 18.

KKR, Deutsche Bank and Varde Partners founded Latitude in 2015 when they bought GE Capital’s Australian and New Zealand consumer lending arm for A$8.2 billion.

Last year, Latitude deferred a planned IPO that would have valued the business at about A$5 billion due to market conditions and a management change, while the country’s financial industry was also being scrutinized by a national misconduct inquiry.

“While it is disappointing that we are not in a position to progress a public listing at this stage, we will continue to execute on the growth strategy with the support of our shareholder group.” Fahour said in a separate statement emailed to Reuters.