Tech firms will be lured to float in London rather than foreign stock exchanges by a proposed revamp of initial public offering rules.
David Willetts, Minister of State for Universities and Science has hinted that listing rules will be relaxed in several low-key announcements over recent days.
The details are sketchy, but the aim is for British and European companies to launch in London rather than New York or the fast emerging Singapore and Hong Kong exchanges.
One change Willetts did reveal is the government wants to let growth companies list a smaller part of their business than currently required – down to as low as 10% of shares from the current 25%.
As part of the government’s campaign to slash red tape for businesses, he also suggested reporting rules may ease for these companies.
IPOs and job creation
“We need to ensure that companies starting here can be properly funded,” said David Willets,
“There is a rich crop of innovative European high-tech companies that will be going to the financial market over the next few years. We’re determined to make sure that as many as possible should do and IPO and float in the UK, not elsewhere.”
Willets is optimistic about the new route to market bringing new investment to London coming months by following the lead of President Obama’s Jobs Act which smoothed the way for listings on US stock markets.
“There is a direct and proven link between IPOs and job creation,” said Xavier Rolet, London Stock Exchange Group Chief Executive.
“Attracting both entrepreneurial businesses and the investors that support them to the UK is key to driving growth and generating jobs. We are delighted to be working on this package of measures with the UK Government.”
Global internet economy
Industry insiders Index Ventures, venture capitalists with shares in more than 100 start-ups, reckon as many 30 tech companies are waiting to go global with an IPO.
“European tech companies like Criteo, Wonga and Moshi Monsters, are poised to capitalise on the global internet economy and perhaps enter the pantheon of great public companies,” said the Index Ventures blog.
“The UK is home to at least 10 of these high-growth companies, while six are German, five are French, while the rest are distributed across Israel, Russia, Spain, Italy, the Nordics and Eastern Europe.
“We also know of dozens of companies that might have chosen to go public and double down on their growth, but instead chose to sell themselves to the likes of eBay (Skype in 2003, sold 2005), and Amazon (Lovefilm: bought 2003, sold in 2011), because an IPO was not considered a realistic option.”
