London Holds On to Europe IPO Crown as Rival Venues Close In
London's status may be tested shortly as high-profile flops and continental rivals step up the pressure.
(Bloomberg) -- London was Europe’s top venue for initial public offerings in 2021, a status that may be tested as high-profile flops and continental rivals step up the pressure.
IPOs in Britain raised 16.7 billion pounds ($22 billion) this year, beating Stockholm’s tally of 127 billion kronor ($14 billion) and Amsterdam’s 11 billion-euro ($12.5 billion) haul. But the numbers mask London’s increasingly precarious position.
The U.K. is no longer Europe’s de-facto destination for IPOs, with foreign issuers increasingly choosing Amsterdam. The Dutch city is also the region’s blank-check capital, while London is a laggard in this trend.
“Pre-Brexit, London was the obvious listing venue in Europe, but some might argue that’s no longer the case,” said Duncan Smith, head of European equity capital markets and equity syndicate at RBC Capital Markets. “Rivals are chipping away at the corners.”
The U.K.’s 2021 winnings are largely thanks to domestic issuers. These include bootmaker Dr. Martens Plc, online marketplace operator Auction Technology Group Plc, DNA-sequencing company Oxford Nanopore Technologies Plc and private equity firm Bridgepoint Group Plc.
But the year is marred by painful flops and poor returns. Food-delivery startup Deliveroo Plc shook the market with one of the worst U.K. debuts on record in March, followed by semiconductor firm Alphawave IP Group Plc’s disappointing showing in May. Online retailer THG Plc is trading 74% below its September 2020 IPO price, hit by growing concerns about governance and its Ingenuity division.
The U.K. is working hard to hold on to its dominance, however. New listing rules came into effect this month that allow for unequal voting rights on the top tier segment of the London Stock Exchange and lower the minimum stake founders must float in an IPO.
“Listing changes to the London market, especially the provision for smaller floats, are positive,” said Nick Koemtzopoulos, Credit Suisse Group AG’s head of ECM for Europe, the Middle East and Africa. “It’s likely to attract more tech, fintech and growth-oriented businesses.”
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