Adding a new way of listing a company on the stock exchange suspiciously
sounds like more regulation. However, advisers are welcoming the move as
increasing IPO options – instead of increasing red tape.
The London Stock Exchange has introduced a listing option (standard listing)
which meets minimum EU requirements for a company’s governance on a main stock
exchange. Effectively “re-badging” the old secondary listing, it’s now open to
UK companies as well as those from abroad.
For advisers, any opening up of the market is welcome in what has been
incredibly tough conditions. After a dismal 2009, IPOs on European exchanges
picked up in the first quarter of 2010. London led the way with 20 IPOs raising
€2.1bn (£1.8bn) – a sharp contrast to last year where 24 IPOs raised a total
€1.6bn for the entire 12 months.
Leading corporate finance figures say with the recovery in listing activity
the new standard listing, which came into effect on 6 April, will help give IPO
clients more options.
But with the AIM market struggling, where firms below the Big Four have been
strong, could the pick-up of IPOs on to the main market’s new offering damage
the mid-tier’s slice of the IPO pie?
Phil Secrett, corporate finance partner at Grant Thornton, said while the new
standard listing will “give more choice to potential IPO candidates”, we won’t
see a change in the choice of advisers they use. “It won’t impact the
competitors’ landscape,” he said. “The relaxed regulations of a new standard
listing won’t disrupt that.” David Snell, AIM market leader at
PricewaterhouseCoopers, says while a company looking for an IPO can choose
between the main market or AIM, he doesn’t believe the new listing will affect
matters too much: “The driver for IPO activity is more likely to be investor
appetite,” he said.
“The more important thing for any company seeking to offer themselves to the
market is that they are getting the right advice for the right choice of
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