London Stock Exchange bounces back to top Europe’s IPO charts
The London Stock Exchange (LSE) is set to end the year atop the European podium for company floats, bouncing back from a weak 2016 at a crucial time for the exchange.
Proceeds from initial public offerings (IPOs) on the London market have been 75 per cent higher than 2016, according to data from accountants PwC.
Total funds raised in 91 floats broke through the £10bn mark for the year so far at €11.7bn, well above the €6.7bn raised last year.
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The value of IPOs in London was almost three times larger than the next rival, the Borsa Italiana, also owned by the LSE Group. London accounted for almost 30 per cent of all funds raised across Europe.
The largest single float during the year in London was Russian energy and commodities conglomerate En+. However, flotations of investment companies have been the driving force behind the strong London performance, with a string of real estate investment trusts and special purpose acquisition companies, according to Lucy Tarleton, capital markets director at PwC.
She said: “The pipeline for UK IPOs in the year ahead looks healthy, and includes a number of international companies, demonstrating London’s continued attractiveness for cross-border IPOs in Europe.”
Ken Wotton, lead fund manager at Livingbridge Equity Funds, an asset manager, said: “I think we could easily see an acceleration of IPO and other corporate activity during the first half of 2018.
“Many management teams and investors may conclude that there is an attractive window of opportunity” before the UK’s exit date from the EU, he said.
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Separate data from Thomson Reuters from the end of last week showed the UK as among the top performers in year-to-date proceeds from IPOs, with only the US, China and India ahead of the UK by deal value.
The figures will provide a welcome boost to the LSE as it approaches the culmination of a bitter spat between the firm and an activist hedge fund manager.
The LSE Group’s board faces a public showdown with Sir Chris Hohn, who manages The Children’s Investment (TCI) fund. Investors will vote next Tuesday on whether they should remove the LSE’s chairman, Donald Brydon, who Hohn accuses of forcing out chief executive Xavier Rolet arbitrarily.
Hohn is working behind the scenes to drum up support for his efforts to oust Brydon, but he has so far received little public backing.
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Aviva, a top 20 shareholder in the LSE, has publicly said it will not vote to remove Brydon, saying it wanted the firm to be able to “move on” from the dispute. Meanwhile, two influential shareholder advisory groups, Glass Lewis and Institutional Shareholder Services, last week recommended investors back the chairman.
The outcome of the vote will also be closely watched further afield, with the LSE currently lobbying hard to be chosen as the venue for the float of part of Saudi Arabian state-backed oil firm Saudi Aramco.
A senior LSE executive joined City of London lord mayor Charles Bowman this weekend in a visit to the Gulf state, with the giant Aramco float thought to have figured in discussions with Saudi business representatives. The City of London Corporation and the LSE declined to comment on the detail of talks.
Read more: City firms travelling to Saudi deny it’s to woo oil giant Aramco