Does the UK want to maintain the current level of publicly listed companies or not? It really isn’t obvious when you consider the way that policy appears to face in two directions at once.
On the one hand the recent listing rules review sought to tilt the playing field in favour of the management of listing companies by, for example, supporting the use of dual class share structures. This reduction in shareholder protections was taken forward on the grounds that founders should be able to shield their creations from the short-termism of investors and potential takeovers.
It’s an interesting approach to amend listings rules to weaken protection for shareholders following the implosion of NMC Health and Finablr, events which have been airbrushed from the discussion about market standards.
Meanwhile, on the other hand, the UK also seems intensely relaxed about UK-listed companies being taken off the market, increasing into private equity ownership. Already this year we’ve seen G4S taken private, with Morrisons and Ultra Electronics also on the way out. Other live non-PE takeovers of large UK listings include Meggitt and Avast.
In general ministers seek to portray takeovers of UK listings as evidence that the country is ‘open for business’ and that such events show the attractiveness of UK assets. But it also suggests that the UK has a greater interest in companies listing and delisting here, rather than being listed here.
Transactions, be they IPOs or takeovers, involve very hefty fees levied by people working and paying taxes in the UK. Meanwhile some of the companies that list here don’t have a lot more than a letterbox (hello NMC Health again). And the tech companies that the reintroduction of dual class structures is notionally intended to attract are often small employers.
There are plenty of people in the City quite happy to try to steer policy within government, and regulators, in a such as way that it’s transactions that end up being prioritised, rather than ongoing listings. To what extent policymakers recognise this is another question.