Hunt calls Dorneywood summit to spice up flagging UK inventory market

Apr 27, 2024 at 8:13 PM

Jeremy Hunt is convening a summit geared toward attractive extra firms to London’s inventory market amid an accelerating exodus of companies being picked off by abroad and monetary predators.

Sky News has learnt that the Treasury has invited the bosses of a few of Britain’s most distinguished personal firms to attend a gathering subsequent month at Dorneywood, the chancellor’s weekend nation residence.

Sources mentioned the day-long occasion on 16 May would goal entrepreneurs behind potential flotation candidates from the fintech and biotech sectors.

Bim Afolami, the City minister, and Lord Petitgas, the prime minister’s chief enterprise adviser, will even be current, alongside key authorities officers and executives from the London Stock Exchange, the sources added.

In the invitation, a replica of which has been seen by Sky News, the Treasury mentioned attendees and the chancellor would “discuss the UK’s capital markets and how they can support innovative, high-growth companies such as yours to achieve your growth ambitions”.

“The UK’s capital markets play a key role in our economy: driving growth, creating jobs and facilitating investment.

“The authorities is dedicated to making sure that the UK stays the perfect place for firms to develop, and is already taking ahead an formidable programme of reforms to enhance the competitiveness of the UK.”

Dozens of firms, together with the likes of digital banks Monzo and Starling Bank, are understood to have been on the invitation checklist.

The Dorneywood summit has been deliberate for a number of months, in accordance with officers, who denied that it was being staged in response to a glut of firms which have introduced in current weeks that they’re in receipt of takeover bids or that they might unilaterally delist from the London market.

Approaches this week for Anglo American, the £30bn mining large, and Darktrace, the cybersecurity firm, have exacerbated the impression of a rising ‘de-equitisation’ of the UK inventory market.

Although neither of these offers have but to be formally agreed, a string of others have, together with International Paper’s bid for DS Smith, the FTSE-100 paper and packaging group, which was revealed by Sky News final month.

Other firms which have agreed offers with suitors embrace Virgin Money, which is about to be purchased by Nationwide in a £3bn deal.

Yet extra, such because the Royal Mail mother or father International Distributions Services and the music royalties firm Hipgnosis Songs Fund, are in receipt of great takeover approaches.

While frenetic intervals of mergers and acquisitions are removed from unusual, bankers and buyers level to a dearth of engaging new alternatives to deploy capital as a result of the move of preliminary public choices has been so gradual.

Many of the businesses that London would have hoped to draw, together with the personal fairness agency CVC Capital Partners and the chip designer ARM Holdings, opted to checklist in Amsterdam and New York respectively.

The notion of London’s decline is being heightened by the selections of boards to maneuver their present UK listings to different worldwide exchanges, with TUI Travel and Flutter Entertainment, the playing group behind Paddy Power, amongst these to relegate their London market presence.

Bosses of firms as giant as Shell, the oil behemoth, have additionally begun to acknowledge publicly their frustration at what they understand to be a gulf between their intrinsic valuation and that which the general public markets are attaching to them.

Earlier this month, the boss of E-Therapeutics, a fast-growing however loss-making biotech firm, described the London inventory market as “broken and closed” as he introduced plans to delist it and pursue a New York flotation at a future date.

This weekend, one authorities insider mentioned the Dorneywood assembly can be essential as a result of it might spotlight to fast-growing British firms that itemizing abroad “is not all milk and honey”.

A lot of the UK-based companies – resembling Arrival, Cazoo and Benevolent AI – which went public in Europe and the US in the course of the now-faded increase for particular goal acquisition firms – have seen their valuations crash, with some subsequently cancelling their listings.

“We need to explain to companies why London’s capital markets are the right place for these businesses to go public,” mentioned one authorities supply.

A Treasury spokesperson mentioned: “The chancellor is meeting with a number of firms to hear their reflections on UK markets and what more the government and regulators can do to support their growth.”