The London Stock Exchange (LSE) is facing a crisis as several medium-sized listed businesses are selling out to US rivals due to the very low valuations of LSE-listed companies compared to their US counterparts, according to an article by John Colley in The Conversation Indonesia. This exodus has led to a decline in the number of advisers supporting listed businesses in London. Private equity firms are also contributing to the problem by buying and selling businesses at a profit, leading to a decrease in the number of flotations on the LSE.
The LSE's acquisition of US data giant Refinitiv in 2021 may have also contributed to the crisis. The UK government has announced measures to address the issue, including providing tax incentives for investing in British businesses, but these are unlikely to have a significant impact. Other potential solutions include increasing the pay of directors of UK-listed companies, allowing multiple share classes, or adopting special purpose acquisition companies (Spacs) like the US. However, these solutions come with their own challenges and risks.
The Darktrace takeover by US private equity firm Thoma Bravo has sparked a debate on the impact of US involvement in British tech. While some argue that the US tech scene is a predator to British tech, the reality is more complex. British startups have strong ties with the US, as competitors, collaborators, and customers. This collaboration has been beneficial for the UK, as it has built a formidable AI ecosystem with the help of American investors and corporates. However, there is a disconnect in the public discourse and policymaking environment, where foreign investment is loved but foreign exits are hated. The UK needs to address this issue and make itself a more attractive proposition for tech companies. The challenges include opening up funding, fixing regulations, and creating a thriving domestic capital market for tech. Until these challenges are addressed, policy needs to work with the tides of the tech economy and understand the complexities of the UK's tech relationship with the US.
Ocado Group PLC is considering a move to the US to solve its identity crisis as it tries to position itself as a technology company. The company's technology sales grew 44% year on year, while retail grew just 7%. Some analysts see a spinning out of Ocado's retail operations as a logical next step. The recent addition of Gavin Patterson to the board, a former CEO of BT and former president and CFO of Salesforce, may indicate a move towards a more tech-focused strategy. Ocado's undervaluation as a tech company in the UK market and disappointing financial results have led to speculation about a potential listing change.
[732c5f23] [3a11ddaf] [d4d27805] [c4a83736] [45519da2] [a87f960b]