London Stock Exchange needs ‘major reforms', warns US investor

Telegraph

22-05-2025

The London stock market needs 'major reforms' to compete on the world stage, a US private equity billionaire has said.
Orlando Bravo, the managing partner of Thoma Bravo, said reforms were 'long overdue' amid concerns British companies have struggled to attract the same stock market valuations as US rivals.
Mr Bravo, whose net worth is estimated at more than $13bn (£9.7bn), said strict rules governing how UK companies can be acquired 'chills the market', making British businesses less attractive to US bidders.
He added that stock markets in the UK and the US needed 'major and incredibly overdue' reforms around how information is shared.
Thomas Bravo, a US investment business with more than $179bn under management, has taken over several UK-listed companies, fuelling concerns that the London stock market is in crisis. Mr Bravo's comments could be taken as an example of self-interest.
However, he argued that making it easier for companies to be taken over would increase stock market valuations in the UK overall, as investors would factor in the possibility of a bid even if deals did not necessarily rise. Mr Bravo said the current takeover rules make it 'very difficult' to do deals.
His criticism adds to widespread concerns in the city about an exodus of companies from Britain's stock markets. The UK has seen a flood of companies quit its main market in take-privates or by re-listing in the US. Last year, 88 companies quit the stock market, the highest number in 15 years.
One analyst said the UK risked having 'the best regulated graveyard' if it did not shake up its rules.
Mr Bravo said the UK had a 'wonderful opportunity' to change its takeover rules to boost the market. There are currently strict rules around how companies disclose and manage approaches by bidders, governed by the Takeover Panel, a city regulator.
The private equity baron said rules requiring disclosure of takeover interest meant bidders would consider it simply 'easier to look at some other stock', potentially harming valuations.
Rachel Reeves, the Chancellor, has urged Britain's regulators to cut red tape to boost growth. The watchdog has already sought to narrow the scope of deals it oversees.
Thoma Bravo bought Darktrace, the British cyber security business launched by entrepreneur Mike Lynch, last year in a $5bn deal. It also owns Sophos, an Oxfordshire cyber security company it took private in a $3.8bn deal in 2019.
Mr Bravo said he could consider relisting Darktrace in Britain in the future, despite a lack of public offerings in the UK and fears of an exodus of promising companies to US markets.
He said there was a possibility Cambridge-headquartered Darktrace could enjoy a higher valuation in Europe, given a dearth of technology listings in the region. 'Given the lack of assets in that market, Darktrace, if ever we were to list that company again, perhaps we would look at it,' he said.
He added it could be 'either' a UK or US public company in future. 'The fact that they are already here [in the UK] that could make sense for it,' he said.
Chicago-headquartered Thoma Bravo, which has long focused on cyber security and technology deals, earlier this year closed its first dedicated fund, worth €1.8bn (£1.5bn), aimed at taking over European businesses.