The London Stock Exchange in 2024 saw the largest outflow of companies since the global financial crisis with many companies citing declining liquidity and lower valuations as the key reasons, recent data by EY has shown.
According to EY, 88 companies delisted from the exchange or transferred their primary listing from the main market – in the highest number seen since 2009.
Among those who announced plans to ditch their main UK listing were takeaway firm Just Eat Takeaaway, Flutter Entertainment, travel group Tui AG, and equipment rental firm Ashtead group.
Other companies such as Watches of Switzerland Group PLC faced pressure from activist investors to swap their main stock market listing to the US.
Mergers and acquisitions also contributed to delistings
Scott McCubbin, EY’s IPO lead for the UK and Ireland, said:
Ongoing geopolitical instability, slow economic growth and a diminished appetite for domestic equities among pension funds have impacted valuations and liquidity.
We also saw the largest outflow of companies from the main market since the global financial crisis as companies sought access to a deeper pool of investors and the prospect of improved liquidity on other exchanges,” he added.
However, while some companies did de-list to move across the Atlantic to the US markets, analysts have pointed out that majority of the delistings took place because of mergers and acquisitions.
“Nearly 50 were taken over, at an average premium of 45 per cent,” Russ Mould, investment director at AJ Bell told The National.
“All that says to me is that either trade or financial buyers thought that there was value to be had in London-listed assets and they acted accordingly by buying them, and it is hard to see that as a negative, since the price or valuation paid is the ultimate arbiter of investment return.”
IPOs much lower than delistings
In stark contrast to the number of de-listings, only 18 companies listed on the stock exchange, in the lowest volume of listings since EY started recording the data in 2010.
However, there were some notable debuts on the bourses like that of French TV and film production giant Canal+, which was the capital’s only £1 billion-plus flotation in 2024, fetching a valuation of £2.6 billion.
Market insiders are cautiously optimistic about 2025.
High-profile potential listings include Shein, the fast-fashion giant, which is eyeing London after shelving US IPO plans due to allegations of forced labor in its supply chain.
Insurer Canopius and consumer credit firm Newday are also preparing for floats that could be valued at £3 billion and £1.5 billion, respectively.
“As we enter 2025, there are reasons for cautious optimism,’ McCubbin said, adding,
A stabilised domestic policy environment post-election, robust pipeline of deals, and listings reform are creating opportunities to restore London’s competitiveness, which could drive a rebound in activity in the first half of 2025.
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