More than £10 billion departs London Stock Exchange in a week as crisis deepens
Several major listed companies unveiled plans to depart the London Stock Exchange in the past week in deals worth a combined £10.2 billion as the crisis facing the exchange shows signs of deepening.
Wealth management firm Mattioli Woods today became the latest firm to quit the public markets after it recommended a £432 million offer to be acquired by private equity firm Pollen Street Capital.
Pollen Street’s offer of 804p per share represents a 34% premium on yesterday’s closing stock price and 42% above the average price the stock has traded over the last six months.
Mattioli Woods dealt a parting shot on the problems of the public markets as it prepared it leave the London Stock Exchange, saying it “recognises the opportunities that can be delivered under private ownership…with the support of a growth-focused shareholder” adding that going private provides “the flexibility to take longer-term decisions to maximise the growth potential of the business.”
On top of Mattioli Woods’ decision today, the past week alone has seen the proposed departures of Spirent Communications, which had been listed for decades, British bank Virgin Money, packaging firm DS Smith and logistics firm Wincanton. Other firms such as office business IWG have begun exploring options to move their primary listing to New York, while some blue-chips including Direct Line and Currys have rejected private equity takeovers in recent weeks.
The moves add further pressure on the government and exchange operator LSEG to show it can stem the continued hemorrhaging of London-listed companies going private or switching to foreign stock exchanges in search of higher valuations.
Chancellor Jeremy Hunt this week unveiled plans for a ‘British ISA’ in a bid to increase investment into UK equities, under which retail investors would be able to up the amounts they can invest tax-free into stocks and shares by up to £5,000 if they put more cash into UK-listed businesses. But analysts have expressed doubts that the plans would have a tangible impact on corporate valuations or stock market activity.
