London’s capital markets have faced multiple setbacks in recent years as large companies opt to shift their listings to New York or pick European cities for their market debut.
Yet the tide appears to be turning, as London presses ahead with reforms and now looks set to attract public market listings of European companies worth about £30 billion over the coming years.
London has already won the business of Canal+, the French media group, and Metlen, a Greek energy company, and appears to be in pole position to secure the initial public offerings of Visma, the Norwegian software company, and Newlat, an Italian producer of canned tuna.
City sources have told The Times that the government’s reforms to capital markets have been key to improving its attractiveness to multibillion-pound companies.
Brian Hanratty, head of equity capital markets at Peel Hunt, the City investment bank, said the next wave of IPO candidates would gauge markets in September before deciding their next steps.
“There’s a growing acknowledgement that London is the exchange of choice for international European companies considering a listing venue,” he said. “A number of companies have chosen London as their listing venue positively and that has given others encouragement to do the same.”
Canal+ was listed on the London market last December as part of the break-up of the media conglomerate controlled by Vincent Bolloré, the French billionaire. The group span off its various interests in media, advertising and publishing and picked the UK market for the listing of Canal+, the TV streaming and film production company known for making the Paddington Bear films.
The production company’s market capitalisation came under pressure initially as French funds with ownership interests in Vivendi, its former parent, sold down their stakes and its shares fell from an opening price of 290p to 191¼p on Christmas Eve and to 150p in April.
Yet the group has since enjoyed a recovery and shares are now changing hands at about 240p, giving the group a market capitalisation of £2.4 billion. It is aiming to more than double in size over the coming years.
Metlen, the energy and industrials group with a separate listing in Athens, launched the public trading of its shares in London at the start of this month.
The group is seeking to be included in the FTSE 100 index at the next reshuffle in September, having met a number of key criteria, with a free float of more than 70 per cent of its market capitalisation and a group valuation of more than £6 billion, almost twice that of Croda International, the blue-chip index’s lowliest constituent.
Metlen, the energy and industrials group led by Evangelos Mytilineos, may be included in the FTSE 100 next month
JAIMI JOY/BLOOMBERG VIA GETTY IMAGES
Metlen’s entry to the UK market came after a number of companies such as CRH, the building materials supplier, and Flutter Entertainment, the gambling group, exited the FTSE 100 index as they shifted their primary listings from London to New York.
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Scott McCubbin, UK IPO leader at the consultants EY, said: “We’ve always had the story about people leaving the UK. What you are seeing now is companies coming to the UK because of their access to the capital markets.”
Newlat, the food business that includes the Princes Tuna, Crisp ’N Dry cooking oil and Napolina brands, is also looking to London as it sounds out bankers for a listing that would give the Italian-owned group a valuation of at least £700 million.
Newlat, an Italian-owned food business that makes Princes Tuna, is also looking to London
ALAMY
Visma, a software provider owned by Hg Capital, the buyout firm, is considering a London listing after being valued at €19 billion in 2023. It provides accounting, payroll, invoicing and HR software products to businesses and has been part of the private equity firm’s investment portfolio since 2006.
One City source said the Norwegian company’s possible market debut was a “very positive” development because the London market had been missing out on the “jumbo companies”. Verisure, a home security business owned by Hellman & Friedman, the American private equity firm, has chosen Stockholm for its IPO, which could value the company at more than €20 billion, including debt.
McCubbin said that while some mega-cap groups would choose elsewhere, London remained the only market capable of taking on multiple deals worth between £10 billion and £20 billion.
“Size matters — and outside of New York, the capital market that you’d want to list western companies in is the UK because it is the second largest,” he said. “So that never went away. Its ability to take on companies with a £10 billion asset is there, and other markets don’t have that ability. Smaller markets struggle with that.”
One City source said European companies were also increasingly realising that trading on other exchanges had “not been that great”.
European markets attracted some of the most significant public offerings last year as the London drought dragged on, but the picture for the continental listings market has been mixed.
Puig, the Spanish owner of the Charlotte Tilbury brand, opted for Madrid with its €14 billion IPO, but its shares are down by about a third at just north of €16, while Golden Goose, the shoe brand, pulled its plan to float in Madrid last summer.
By contrast, CVC Capital Partners, the private equity firm, experienced some difficult trading when global markets were roiled in April but its shares have made significant gains overall since listing in Amsterdam. The shares were listed at €14 each and are now worth almost 25 per cent more, trading at around €17.35.
One source close to a company considering London for an IPO pointed to government reforms as a key reason for the growing attractiveness of the UK market, saying the package of measures had shown the government’s willingness to support capital markets. Yet they said the most effective reform would be a cut to stamp duty on share trading and this appeared to be off-limits for the Treasury.
New London listing rules came into effect in July last year and further changes are being considered. McCubbin said policymakers were overhauling the regulatory framework to help London compete with Amsterdam.
He added: “They recognised that Amsterdam was a much more open market than the UK. I think that is now changing. The UK does look to Amsterdam to try and see, ‘Can we get ourselves to be at that type of level?’
“Changing the rules doesn’t have an impact overnight, it takes time. It takes a few years for it to flow through and it will reap its reward over the next two to three years. It does feel like a lot of companies are looking to the UK. They’re seeing it as a much more open market.”
President Trump’s decision to start introducing wide-ranging tariffs on imports into the United States has affected New York’s status as a reliable listings destination. Companies with a combined market capitalisation of more than $80 billion delayed IPOs in the wake of his “liberation day” announcement on April 1.
McCubbin said: “Stock market performance in the UK is outperforming stock market performance in the US right now. The US looks more risky than it ever has because of tariffs and uncertainty, which the equity markets hate, and that causes drift back across the Pond to the UK.”