Row as retail investors denied chance to buy shares in Just-Eat
BANKERS to Just-Eat, the London-based online food takeaway business, yesterday announced plans to float on the stock market in a deal that will exclude retail investors.
The company has chosen to list in London in a confidence boost for the London Stock Exchange but its decision to exclude private investors was met with dismay by the Wealth Management Association, whose chief executive Dr Tim May said: “How can any company which relies on the custom of the general public ignore them when it floats on the stock market?”
May went on to add: “The current resurgence of initial public offerings in the London market is certainly welcome. But it isn’t good news for everyone. The UK’s corporate advisers are consistently overlooking the country’s four million retail investors as they make arrangements for company flotations.”
A number of recent flotations, including Poundland, AO World and Foxtons, have all excluded retail investors despite the fact that last year’s privatisation of Royal Mail, and floats such as Infinis and Merlin, confirmed there was an army of them waiting to support new issues.
Just-Eat said it would raise £100m of new money in a deal that could value the group, which has earnings of £14.1m, at up to £900m.
“I think they’ve missed a real opportunity here,” said one broker, “although getting retail investors involved does complicate the process.”
Barclays has been the bank most likely to back retail issues. It was involved with Royal Mail and also successfully involved retail investors in the floats of Merlin and the renewable energy group Infinis.
Other banks tend to be cautious about introducing a retail element on the grounds it can slow the process down and make it more complicated. But there will be disappointment over this latest exclusion.