Executive group discuss revival for Britain's smallcap AIM market
LONDON, March 7 (Reuters) - A group of executives and financiers has in recent weeks met with companies and brokers to find backing for a plan to approach the London Stock Exchange with a proposal to revitalise its struggling Alternative Investment Market.
Under the plans, AIM - which was founded in the 1990s to help smaller companies gain access to capital - would be rebranded and relaunched as the Global Growth Exchange, according to a presentation by the group seen by Reuters. Two people with knowledge of the talks said the plan would allow new investors to take a stake in the market.
The group is led by Jon Prideaux, the former chief executive of London-listed fintech company Boku (BOKU.L), opens new tab.
"We believe that there's an opportunity for the London ecosystem to provide a compelling public alternative to many companies worldwide which are currently using private capital to fund their growth," Prideaux told Reuters.
"We plan to discuss the details of our strategy and approach with LSEG soon. In preparation for that meeting, we have consulted widely with brokers, market makers, fund managers and other interested parties. We have been gratified by the very widespread support that we have received."
Prideaux did not give details about the proposals. A source who had met with the group said the plan would involve LSEG (LSEG.L), opens new tab spinning off AIM to allow new investors to come in.
LSEG, however, said it was not interested in making such a deal.
"AIM is not for sale," LSEG said in a statement to Reuters on Friday. "It is a vital component of our strategy to build a funding continuum that is seamlessly connected so that companies can start, grow, scale and stay in the UK.
"Over the past 30 years, AIM has established its position as the preeminent market for dynamic high-growth businesses supported by a remarkable community of companies, advisors and investors."
LSEG has previously dismissed suggestions it could sell the wider London Stock Exchange and CEO David Schwimmer told reporters last week he sees the exchange business as a "core part" of its strategy.
AIM and the wider London Stock Exchange have suffered an exodus in the past two years as a wave of companies have either been taken private or delisted.
Last July, Britain's financial regulator, the Financial Conduct Authority, pushed through what it called the biggest overhaul of its listing rules in 30 years in a bid to boost London's appeal as a destination for initial public offerings.
A prolonged period of withdrawals from UK-focused equity funds has weighed on valuations. UK funds suffered 9.6 billion pounds ($12.38 billion) of outflows in 2024, marking the ninth consecutive year and the worst on record relative to the wider market, according to funds group Calastone.
After a flurry of delistings and deals to take companies private last year, the number of companies listed on AIM slumped below 700 for the first time since 2001, according to accountancy firm UHY Hacker Young.
LSEG has been transformed into a data and analytics behemoth by Schwimmer, in part through its $27 billion acquisition of Refinitiv completed in 2021. Shares in LSEG are trading up around 155% since he took over in April 2018, implying a market capitalisation for the company of 57.5 billion pounds, according to LSEG data. Reuters provides news for LSEG's news and data terminal Workspace.
The diverging fortunes of LSEG and its exchange have triggered calls from some investors to spin off the exchange business.
"A strategic spin-off of LSE and U.S. relisting of LSEG could allow its shares to trade at a much higher multiple, bridging the gap with its U.S. peer, S&P Global," said Stephen Yiu, the chief executive of equity fund Blue Whale, an LSEG shareholder.
Tim Cockroft, chair of Singer Capital Markets, an adviser to AIM-listed companies, said his firm would be interested in backing a plan for LSEG to spin off its smaller market, should LSEG be open to the idea.
"We are great believers in (the UK smallcap market), and enhanced autonomy and identity could help grow the market segment," Cockroft said.
($1 = 0.7754 pounds)
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