Rising software star WANdisco deals fresh blow to London market with US listing proposal
Fears deepened today over the London stock market’s ability to attract cutting-edge companies and retain some of its biggest names as a fast-growing tech company joined the exodus from the City to New York.
Software business WANdisco confirmed speculation it was weighing up a secondary listing in the US, adding that it was “in the early stages of proactively exploring this option.”
The timing could not have been worse, with the announcement coming as the third of its kind in as many trading days in the capital, following similar moves by multi-billion-pound building products group CRH and online gambling business Flutter.
The highest profile hammer blow came at the end of last week, when chip designer Arm announced last week that its return as a listed company would be in New York, not London where it was once one of the FTSE 100’as biggest names, powering the smartphone revolution.
James Hughes, chief analyst at Scope Markers, said that WAN’s move would become “potentially emblematic” of the trend, with attention now focusing on what happens to the amount its shares are worth in the US.
“Any rapid improvement in the valuation could act as a catalyst for others to pursue the American dream, too. “While dual listings are nothing new from AIM companies, the current underlying mood will really put progress and performance here in the spotlight.”
WAN is nowhere near the size of Arm, but it is the kind of fast-growing tech company politicians are clamouring to help develop and keep in the UK. The Sheffield-based firm helps companies run the complex networks that underpin a range of systems.
New York is picking up business with a deeper pool of capital and less onerous listing rules. It landed the Arm re-listing as its Japanese parent Softbank raises funds despite the lobbying of a succession of prime ministers, including Rishi Sunak. The Financial Conduct Authority was reported to be in talks on easing some listing rules, but still London lost out, although the firm said a secondary UK listing was possible later.
Its decision to choose the Nasdaq over the LSE highlights the growing gulf between London and New York as trading centres. There were even reports last week that the biggest single company on the FTSE 100, Royal Dutch Shell, had considered a similar move before deciding to stay put.
Joshua Raymond, Director at online investment platform XTB.com said: “It’s clear the attractiveness of the UK market has lost some appeal in recent years after the budget car crash of last year, Brexit red tape and instability at the heart of government.
“If firms believe they can get higher valuations in an equally reputable markets, it’s no surprise they will make that strategic move.”