Despite challenging conditions in the world markets since January 2000, 70% of AIM listed companies and 94% of companies on the Main Market achieved the float price they were expecting, according to a survey published today by pan-European law firm, Eversheds, in partnership with the London Stock Exchange. The survey reveals an overall satisfaction in the flotation process, with 87% of companies confident they had met their original objectives of raising funds and boosting credibility.
The research is good news for the London Markets, suggesting a greater level of confidence than has generally been predicted. Almost half of the companies surveyed are planning to undertake acquisitions in the next 12 months, with a further 27% saying it is a possibility.
So far this year, around 250 new companies have joined the London Stock Exchange’s Main and AIM markets. “The number and quality of new companies coming to London’s markets in 2001 contradicts the commonly held belief that this year has been inactive in terms of new quotations,” comments Tim Ward, Head of Issuer Services at the London Stock Exchange.
He adds, “This research points to a real maturity on the part of UK industry. Companies are actively reviewing the market that best suits their needs and planning and preparing for their flotation accordingly.”
The research is uniquely based on detailed face to face interviews with 85 UK companies. Eversheds’ corporate partners asked financial directors and managing directors from a cross-section of UK companies a series of wide-ranging questions about their flotation experiences.
“Floating on the markets is one of the most important events in a company’s development and the pitfalls are many and varied. Despite current market conditions, achieving a successful flotation should not be a leap of faith. While there are many factors out of an organisation’s control, by choosing advisors carefully, freeing up directors’ time and having a robust business plan in place, the process can go smoothly,” comments Martin Issitt, head of Eversheds Corporate practice.
He adds, “For a business and its advisers looking to float, this research should be of particular interest as it gives a real insight into the experiences of newly quoted companies. ”
Notes to editors
The criterion for inclusion in the survey was that companies should have floated on the London markets between January 2000 and October 2001. A total of 85 Main Market and AIM companies took part, representing a significant number of all such companies coming onto the market during this period. Of these, approximately one quarter are Main Market companies and the rest are on AIM.
Companies from the technology, media and telecoms sector make up nearly half of the respondents.
Eversheds has over 2,000 legal and business advisors providing services to the public and private sector business and finance community. It has 17 European offices and 3 associated offices in Asia.
Eversheds is named as lead advisor to 120 UK publicly quoted companies - more than any other UK law firm in 2001 (Hemscott, October 2001).
About the Stock Exchange
The London Stock Exchange is one of the world’s leading equity exchanges and a leading provider of services that facilitate the raising of capital and the trading of shares. The London Stock Exchange is the most international equities exchange in the world and Europe’s largest pool of liquidity. By the end of 2000, the market capitalisation of the UK and international companies on its markets amounted to £5.3 trillion, with over £5.4 trillion of business transacted over the year. The London Stock Exchange is a Recognised Investment Exchange (RIE) under the Financial Services Act and is supervised by the Financial Services Authority.
For more information, to request a full copy of the survey or to request an interview, please contact:
Rachael Chambers or Kelly Grant at Key Communications, Tel:020 7580 0222
Janice Sanders or Matthew Duggan at Eversheds. Tel: 020 7919 4500. Email: JaniceSanders@eversheds.com
Jamin Smith/ Ian Campbell at London Stock Exchange. Tel:020 7797 1222
Email: email@example.com/ firstname.lastname@example.org
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