A leading software company has become the latest London-listed firm to set its sights on a move to New York.
In a fresh blow to the City, Wandisco is exploring ‘an additional listing’ in the US.
The £875million cloud computing specialist, whose technology helps businesses move and analyse data, said it will hold on to its listing on London’s junior Alternative Investment Market (AIM).
In a fresh blow to the City, cloud computing specialist, Wandisco is exploring ‘an additional listing’ in the US
But the move by Wandisco, which was set up in Silicon Valley in 2005 and has headquarters in Sheffield and California, has raised further questions about the attractiveness of being listed in London.
Its plans to explore a US listing – despite its shares rising more than sixfold on AIM in less than a year – follow high-profile snubs for the Square Mile.
British microchip designer Arm last week said it will float its shares solely on Wall Street, dashing hopes of a dual listing. Its Japanese owner SoftBank was said to have been put off by City rules around disclosing third-party transitions.
Meanwhile, the £30billion building materials giant CRH plans to move its shares to the US.
‘It’s a move that seems to make sense for a company that does so much business State-side, but it hints at further dissatisfaction with London’s ability to cut it as a global financial superpower,’ said Danni Hewson, head of financial analysis at AJ Bell.
London-listed Paddy Power owner Flutter and education group Pearson are also considering an additional listing in America, and oil giant Shell explored moving to the US before eventually deciding against.
Analysts said companies are tempted across the Atlantic by better access to capital and higher valuations, raising fears the London Stock Exchange (LSE) is losing its appeal.
Iain McDonald, founder of investment advisory firm Belerion Capital, said: ‘There is zero surprise that Arm has chosen New York, and many other businesses, particularly where the majority of their operations are in the US, will follow.’
He said if firms like Arm do not list in the US they will ‘simply be acquired by better capitalised, higher-rated US competitors’.
Tweaks to UK stock market rules and proposed reforms aimed at unleashing vast sums of cash held by the pension industry have failed to stem the flow of British firms going abroad.
LSE chief executive David Schwimmer last week said: ‘There’s no one silver bullet in terms of dramatically changing the market environment.’
And Hargreaves Lansdown analyst Susannah Streeter said that Wandisco’s planned New York listing showed ‘how much allure Wall Street holds’.
She added: ‘The sentiment remains strong that investors in the States have more appetite for high growth firms which helps push up valuations, despite the resilience of the London market over recent months.
‘The City has been pedalling hard to attract new IPOs with help from the Government’s listing rules shake-up, but it’s an uphill struggle.’
Streeter added that as worries mount about the global economy, ‘firms are more likely to take a chance in New York for their public futures’.
Wandisco said it has ‘long stated’ its plans to consider an additional listing in America.
The company adding that it ‘remains committed’ to keeping its London listing.
