Decline of listed firms on London's junior market slows

LONDON Mon Dec 24, 2012 8:33am GMT

People walk through the lobby of the London Stock Exchange August 5, 2011. REUTERS/Suzanne Plunkett

People walk through the lobby of the London Stock Exchange August 5, 2011.

Credit: Reuters/Suzanne Plunkett

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LONDON (Reuters) - A decline in the number of companies listed on London's junior stock market eased this year and around half the companies that did leave were bought up or transferred to bigger exchanges, a Deloitte report shows.

It said the number of companies listed on the London Stock Exchange's Alternative Investment Market (AIM) had fallen every year since 2007, but the fall in 2012 was just 4 percent, compared with 16 percent in 2009, its fastest year of contraction.

"During the time of the financial crisis ... the principal reasons why companies were leaving the list were negative," said Richard Thornhill, capital markets partner at Deloitte.

"Either they no longer perceived that the market offered them value ... or the economic climate forced them to de-list. The situation in 2012 has been very different, with the driving force behind companies leaving the list being transactions which have consistently realised value for shareholders."

Of the 113 companies who had left the market by the end of November, 41 were acquired, 17 were subject to reverse take-overs and three transferred to London's main market.

Those companies which were bought received an average premium of 53 percent to their closing share price on the day before the acquisition.

By the end of November, 65 companies had joined AIM, and the share prices of the 44 which raised money on admission had risen an average 26 percent since listing.

"There are good reasons to be confident about the market in 2013," said Thornhill.

(Reporting by Kylie MacLellan; Editing by Ruth Pitchford)

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