Spread-betting company CMC Markets today confirmed it was proceeding with plans to float on the London stock market.
The long-awaited announcement followed weeks of speculation in the City that financier and former Conservative treasurer Peter Cruddas was looking to take his company public with help from Goldman Sachs and Morgan Stanley, who have been advising CMC on the IPO.
The listing could fetch a valuation of as much as £750m according to City A.M. estimates. City A.M understands Cruddas will sell between 25 and 30 per cent of the business, leaving him with a minimum 60 per cent stake. Goldman Sachs owns three percent, former employees hold just under one per cent.
This is Cruddas' second swing at an IPO for CMC, having called off a previous attempt in 2007 due to the onset of the financial crisis.
Markets have been volatile again ahead of this attempt, with the FTSE 100 recording its worst starting week to a new year since 2000 following continued Chinese market woes, lacklustre high street sales, and the stubbornly low oil price.
Cruddas, founder and chief executive of CMC, told City A.M.:
It’s not ideal, to be honest. But there are companies that are performing well. It wasn’t last week that we decided to list, it’s been a seven month decision and we've thought about it carefully.
If markets continue to slide it could jeopardise the company's plans to float. It has 30 days to come to market, according to regulatory rules.
These events are outside of our control. CMC is fit for purpose and the business is in great shape. If the situation changes then we would take that into account, however investors are interested despite market turmoil. When there’s volatility in the market it suits our business.
CMC said it expects to start trading on the London Stock Exchange after admission in early February.
The float would make millions of pounds for Hackney-born Cruddas, who founded the company with £10,000 in 1989 and now owns 90 per cent of it.
Having grown the business from its beginnings in 1989, I am in the privileged position of having seen the market go through many changes. In recent years CMC has benefited from the transformative effect of online and mobile trading on the wider financial spread betting and CFD markets.
Bringing CMC to the public markets will enable us to continue to grow our global brand, build our client base, attract and retain employees and enhance our ability to enable retail traders around the world to trade. Our clients are at the heart of everything we do at CMC and I am delighted that they will have the opportunity to become shareholders in the group as we embark upon the next stage of our journey.
In it's interim results last November, CMC reported net income grew 77 per cent to £20m and underlying profit before tax increased 88 per cent to £26.2m.
Cruddas recently made headlines after he donated £1m to the campaign for Britain to leave the EU.
He and his wife Fiona will together remain majority shareholders of CMC after listing, and have agreed to a two year lock-up period, preventing them from selling their shares, for 50 per cent of their stake and a three year lock-up period for the second half of their interest.
CMC is looking to raise £17m from the listing to meet admission and staff incentive plan costs.