Latest news with #CharlieConchie
Yahoo
13-05-2025
- Business
- Yahoo
Exclusive-Deutsche Boerse, Euronext step up battle against IPO flight to US
By Charlie Conchie LONDON (Reuters) -Two of Europe's major stock exchange operators are stepping up efforts to retain local initial public offerings in the face of U.S. competition, with marketing and research challenging the perception that New York-listed companies fetch higher valuations. Stock exchanges in Europe and the UK have been hit by a drought of IPOs over the past two years and a number of local firms choosing to float or move primary listings to the U.S. for its deeper pools of capital and potentially higher valuations. Deutsche Boerse, which operates the Frankfurt Stock Exchange, is warning of sluggish post-IPO performance, higher costs and the threat of litigation for firms that list in the U.S., according to a document shared with German companies and IPO advisers in recent weeks, and Reuters. It found that about two-thirds of companies that listed in Europe, including Germany, rose on their first day of trading, while only about half of European companies that listed in the U.S. gained on their market debuts. Over time the IPOs from the region also fared better in Europe than in the United States. The data doesn't mention valuation at IPO, but the exchange highlighted in its report several examples of European-listed companies trading at a premium to U.S.-listed peers. Euronext, which operates seven markets in cities including Amsterdam and Paris, is also planning to reissue a similar paper challenging the belief that U.S.-listed firms attract higher valuations than their European peers, its spokesperson told Reuters. "We really see more a competition, if you will, between Europe and the U.S. market in terms of listings, rather than within Europe," Stefan Maassen, head of capital markets and corporates at Deutsche Boerse told Reuters. Exchanges earn fees from companies that list on their platforms and from brokers for trading of securities, and are seen as critical by policymakers to attract investment. DEEPER MARKETS European officials have been looking for ways to deepen the continent's capital markets as the depth and size of U.S. markets are a draw for those eyeing a listing. The S&P500 index has a market capitalisation of $49.5 trillion, almost four times that of Europe's Stoxx 600, according to LSEG data based on Monday's closing prices. European officials are also considering new listing rules to improve access to financing. The efforts by Deutsche Boerse and Euronext to curb New York's allure for European firms echo those of the London Stock Exchange which circulated a 'mythbusting' document in March, questioning the perception that U.S.-listed companies attract higher valuations than those in London. Deutsche Boerse also said in its document it found that the share prices of U.S. listed German companies have fallen 13% on average since 2004, naming internet company trivago and retailer Mytheresa which have both fallen since floating, while issuers in Frankfurt saw a 24% rise. Around 130 European companies worth a combined $667 billion opted to either float or move their primary listing to the United States over the past decade, according to research by capital markets think tank, New Financial. However, 70% of those are trading below their listing price with an overall average fall of 9%, according to the think tank. "We need to make our advantages more visible, and not just globally, but finally also on our own doorstep," Deutsche Bank CEO Christian Sewing said on Tuesday in a speech in Berlin, commenting on the relocation of European company listings to the U.S. Deutsche Boerse warned cross-border listed companies face potentially greater risks of lawsuits. To be sure, some market participants argue the risk of litigation gives shareholders paths to redress. Tariff-induced turmoil roiling U.S. markets could also lift the appeal of European markets, exchange executives say. Some market players, like Eva-Maria Wiecko, Head of Equity Market Solutions, Germany and Austria at Rothschild & Co, are more sceptical. While the U.S. equity market has seen inflows in recent years, European markets have largely experienced outflows. "The recent re-balancing is only a fraction of these numbers, underscoring the continued relative strength of the U.S. market," Wiecko said. ($1 = 0.8950 euros)
Yahoo
06-05-2025
- Business
- Yahoo
From rebound to rescue: how Argentex collapsed on untested currency swings
By Charlie Conchie, Stefania Spezzati and Nell Mackenzie LONDON (Reuters) -In early April, Argentex's chief executive Jim Ormonde and chief financial officer Guy Rudolph were buying shares in the London-listed foreign exchange broker as the stock rebounded from a March slump. Ormonde, installed 18 months earlier amid a flagging stock performance, said in an April 2 statement on the company's annual results that Argentex had "reset" in 2024 and was now "well placed to return to profitable growth." In the year to date, its shares had rallied more than 50%. What followed was a dramatic swing in financial markets and a dizzying decline in the company's liquidity position. Within weeks, Argentex would become one of the first high profile corporate victims of market volatility set off by the global trade war. IFX Payments took over Argentex in a rescue deal for just a fraction of what it had been worth, and the CEO and CFO have gone. Argentex declined to comment. UK-based IFX did not respond to requests for comment. April 2 was also "Liberation Day," when U.S. President Donald Trump unveiled sweeping reciprocal tariffs against numerous countries, triggering heightened volatility for trading firms as currency markets moved widely. The safe-haven Swiss franc surged roughly 7% against the U.S. dollar during April, while Deutsche Bank's currencies volatility index, a measure of currency swings, rose as much as 28%, to its highest level in two years. Argentex had navigated previous big market routs such as the fall of sterling against the dollar in 2022, Brexit and the COVID-19 pandemic. But while it had done scenario modelling and stress testing, it hadn't planned for the dollar's rapid devaluation against many major currencies, according to two people familiar with the company. They spoke on condition of anonymity because the information was private. Argentex was most exposed to a sudden strengthening of the pound, Swiss franc and the euro against the greenback, one of the people said. ZERO-ZERO LINES In its 2024 annual report, Argentex said that "regular stress testing is performed to ensure the group has sufficient collateral pledged and other unencumbered resources to cover its current and potential obligations in the event of a significant market movement." Yet when the market moved against it, Argentex was left exposed to cash calls from its liquidity providers and unable to call margin from many of its clients due to its use of zero-zero lines, according to the person.
Yahoo
04-04-2025
- Business
- Yahoo
Tariff turmoil puts a freeze on global M&A dealmaking
By Echo Wang, Charlie Conchie and Milana Vinn (Reuters) - From Wall Street to Israel and Sweden, U.S. President Donald Trump's new tariffs -- and the global equities sell-off they sparked -- have rapidly scuttled acquisitions and IPOs. The additional U.S. tariffs, which range from 10% to 50%, announced on Wednesday sparked fears of a recession and spiraling trade war, reinforced by China's announcement on Friday of its own new tariffs on U.S. goods and export controls. Among the deals, Swedish fintech Klarna pulled its IPO, and San Francisco fintech Chime is also delaying its initial offering, according to people familiar with the deals. A London private equity firm pulled out of buying a European mid-cap tech company at the last minute on Thursday after the tariff news, a person close to the deal said. StubHub was set as recently as Thursday to start its investor roadshow next week for its already delayed IPO. But by the end of the day, executives decided to push those plans back for at least another week, Israeli-based financial services company eToro also delayed investor presentations for its IPO on Wall Street from Monday until after April 20 due to market conditions and volatility, according to someone familiar with the deal. "It will be very tricky to get any deal to the finish line as cost of debt is expected to go up and it will be harder to ascertain valuations of companies,' a senior banker said. If the trend continues, it could stifle companies' ability to raise funds and to invest, further slowing economic growth. Even before Trump's latest tariff announcement, new U.S. tariffs and worries about trade contributed to a 13% decline in U.S. mergers and acquisitions in the first quarter, Dealogic data compiled for Reuters showed. 'It's not the tariffs, per se, that are the problem," said Antony Walsh, corporate M&A partner at law firm Eversheds Sutherland. 'It's the level of uncertainty that's coming with them that's having the most impact on C-suite confidence." The trade war has sent global markets spiraling, with the S&P 500 and other U.S. indices marking their worst losses since 2020 on Thursday and falling further on Friday after China's announcement. Investment bank JP Morgan raised the odds of a recession by year's end to 60%, up from 40%. The London private equity investor who canceled the European tech company purchase said Thursday's market turmoil deterred the firm from proceeding. 'PIPELINE MORE CHALLENGING' "We just couldn't pull the trigger... We just don't know how Europe is going to react, what this all means for the macro environment, trade wars, etcetera," he said, asking not to be identified because the deal isn't public. At StubHub, executives plan to wait at least a week, maybe even after Easter, before attempting to pitch Wall Street on its shares to give the markets some time to calm down. Tom Godwin, partner at global law firm Freshfields, said there's too much uncertainty in the markets right now, along with mixed messages from the Trump administration creating more havoc in the markets. Philipp Suess, head of equity and capital markets for Germany and Austria at Goldman Sachs, said large expected IPOs have not materialized due to market volatility, without commenting on any particular transaction. "It's clear after last Wednesday night that the IPO pipeline has become more challenging," he told Reuters in an interview. Sign in to access your portfolio
Yahoo
24-03-2025
- Business
- Yahoo
Analysis-Klarna IPO filing spurs hope of British fintech listings
By Charlie Conchie LONDON (Reuters) - Klarna's upcoming U.S. initial public offering could help unlock a pipeline of British fintech flotations after a barren period for new technology listings, investors, lawyers and an executive told Reuters. Stockholm-headquartered Klarna, best known for its buy-now pay-later products, publicly filed to float on the New York Stock Exchange earlier this month in its second attempt at listing on the public markets in four years. It had looked to IPO in 2021, after shooting from a valuation of $5.5 billion to $45.6 billion in three funding rounds. But investors soured on tech companies as interest rates rose and economies stuttered, and the company was forced to cut its valuation to $6.7 billion in a 2022 fundraising. Now it is back, and could be worth at least $15 billion in an IPO likely to be priced in the first half of April, one person with knowledge of the plans said. "Any successful IPO of a high-profile business in the sector will be a catalyst for others to look again at an IPO as a strategic option for growth and/or liquidity," said James Wootton, a partner at Linklaters, who advised money transfer company Wise on its 2021 listing in London. At the peak of a post-pandemic fundraising boom in 2021, 101 fintech companies raised $296.86 billion via IPOs on global stock markets, according to data from PitchBook, compiled for Reuters. But between 2022 and 2024, just 86 firms raised $32.76 billion via IPOs. Klarna's plans have fuelled hopes of a resurgence. "It's quite clear that the market is looking to Klarna as a bellwether for future fintech IPOs, many of which are in a long pipeline," said Tim Levene, chief executive of London-listed fintech investment fund Augmentum. "We hope that Klarna is the first of many to list, which will prove a positive data point for the rest of the market." WAITING IN THE WINGS Challenger banks Monzo and Starling, as well as payments companies Zilch and Ebury, are among the fintech companies considering plans to list at some point in the future, sources close to the companies told Reuters. Zilch, which offers a competing buy-now pay-later product to Klarna, is currently aiming to float in 2026, Philip Belamant, its chief executive, told Reuters. "The Klarna IPO will be a significant moment for the fintech sector, and we'll be watching closely," he said, adding that a successful IPO could "set the stage for greater investor confidence in European fintechs going public". Ebury, a Spanish-founded payments company majority owned by Banco Santander, is gearing up for a London listing by June at the earliest, one person familiar with knowledge of its plans said. The company will likely seek a valuation of around 2 billion pounds ($2.6 billion), the person said, adding the timing would depend on market conditions. Ebury did not respond to a request for comment. Santander declined to comment. It has said in the past that listing Ebury was one of many alternatives for the business. Britain's Revolut has previously signalled its intention to list publicly. A spokesperson for the challenger bank, Britain's most highly-valued startup, declined to comment on specifics. "Our focus is not on if or when we IPO, but on continuing to expand the business, building new products, and providing better and cheaper services to serve our growing global customer base," the person said. Zopa, which is headquartered in London, has no firm timeline for an IPO, a spokesperson said. "We continue to plan towards an eventual IPO, preferably in the UK and can be ready in a short time, however we will wait for the right macroeconomic and market conditions," the spokesperson said. To be sure, many have raised money and can wait, and conditions are volatile, forcing some European companies to put IPOs on hold. "A lot of them (fintech companies) have the luxury of being able to choose their time,' said Patrick Evans, head of UK equity capital markets at Citi. The choice of the U.S. venue by Klarna is also likely to intensify debate over where these fast-growing companies should list. Monzo has discussed floating in Britain or the U.S. but has set no firm timeline or venue for an IPO, a person familiar with the company's plans said. The London Stock Exchange has been making overtures to fintech companies including Zilch, one person familiar with the matter said. Zilch has yet to choose a venue, the person said. The London Stock Exchange Group declined to comment. ($1 = 0.7747 pounds) Sign in to access your portfolio
Yahoo
08-03-2025
- Business
- Yahoo
Executive group discuss revival for Britain's smallcap AIM market
By Charlie Conchie LONDON (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. "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 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)
