By Jack Denton
Two high-tech British firms are considering listings in New York, in a blow to the London Stock Exchange at a time when the city’s post-Brexit role as a financial services hub is changing.
Immunocore, a homegrown British biotech company that completed a $75 million funding round last week, has applied to float on the Nasdaq (NASDAQ:COMP) , choosing New York over London for a $100 million initial public offering.
Immunocore, which has raised a total of $873.2 million since its inception, has joined with pharmaceuticals AstraZeneca (LON:UK:AZN) , GlaxoSmithKline (LON:UK:GSK) , and Eli Lilly and Company (NYS:LLY) , among others, on its cancer drugs, as well as the Bill & Melinda Gates Foundation.
It follows Blue Prism (LON:UK:PRSM) , a London-listed software company specializing in robotic process automation, which first indicated in November 2020 that it had begun exploring a listing in the U.S. The group’s board of directors reiterated in a full-year trading update on Jan. 14 that they were exploring a secondary listing outside of London. The company is currently listed on London’s junior AIM stock market.
In a report in The Times on Monday, Blue Prism Chief Executive Jason Kingdon said that the company was looking at listing in the U.S. because Americans value subscription software companies more highly than British investors, who, he said, don’t have the same knowledge of the sector.
Kingdon also said the London market was “too illiquid and too small.”
Blue Prism saw its stock slide 5% in London trading on Monday. The company notched its fifth year of consecutive revenue growth in the 12 months to the end of October 2020, and reduced its operating loss from the year prior by around £10 million ($13.6 million), to £81.6 million.
These two high-tech British companies are eyeing U.S. markets as the global role of the London Stock Exchange is changing in the wake of the U.K.’s exit from the European Union.
Following the end of the Brexit transition period on Jan. 1, around $8 billion a day worth of European share trading largely moved from London to continental exchanges in Paris and Amsterdam.
Financial services weren’t covered by the post-Brexit trade deal agreed upon by the U.K. and EU, and London finance professionals quoted by Financial News have said they don’t expect an agreement on financial services to be struck for a few years.
And this essential reading: A Brexit Trade Deal Has Finally Been Struck. Here’s What It Means for Markets and Investors.
Immunocore and Blue Prism aren’t the only high-tech British companies looking outside of London.
London-listed food delivery giant Just Eat Takeaway (LON:UK:JET) said on Jan. 12 that it was pausing its decision to list exclusively in London.
After the merger of Danish Just Eat and Dutch Takeaway.com in early 2020, the combined company had planned to delist its shares in Amsterdam in late February 2021 in favor of a London-only listing.
However, with the group’s planned takeover of a U.S. peer, Grubhub, expected to complete in mid-2021, Just Eat Takeaway has changed its tune.
The company said it “will consider, among other things, liquidity and trading volumes across the listings it will have in Amsterdam, London and New York, which will take time to find a natural home following a material acquisition such as Grubhub.”
It isn’t all bad news for London. Food delivery company Deliveroo is preparing for a London listing in what could be the U.K.’s biggest IPO in two years. The company said on Sunday it completed a new fundraising round, valuing the business at more than $7 billion.
Online greetings-card retailer Moonpig set out plans last week to float in London, in a move that could value it at around $1.4 billion. Just hours earlier, Dr. Martens confirmed it was seeking an IPO in London, which analysts said value the iconic shoe-and-boot-maker at around $4 billion.