Another blow to City as software firm prepares US listing: Wandisco plans New York move just days after Arm snubs London
A leading software company has become the latest London-listed company to look to New York.
In yet another blow to City, Wandisco is exploring “additional listing” in the United States.
The £875million cloud computing specialist, whose technology helps companies move and analyze data, said it would retain its listing on London’s Alternative Investment Market (AIM).
New blow to City, cloud computing specialist, Wandisco explores “additional listing” in the United States
But the move from Wandisco, which was established in Silicon Valley in 2005 and is headquartered in Sheffield and California, has raised new questions about the appeal of being listed in London.
Its plans to explore a US listing – although its shares have more than sixfold increased on AIM in less than a year – follow high-profile rebuffs for the Square Mile.
British microchip designer Arm said last week it would only float its shares on Wall Street, dashing hopes of a dual listing. Its Japanese owner SoftBank was reportedly discouraged by city rules regarding the disclosure of third-party transitions.
Meanwhile, building materials giant CRH, worth £30billion, plans to transfer its shares to the US.
“It’s a move that seems to make sense for a company that does so much business on the state side, but it hints at further dissatisfaction with London’s ability to undercut it as a global financial superpower,” Danni said. 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 considered moving to the United States before ultimately deciding against it.
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: “It’s no surprise that Arm chose New York, and many other businesses, especially where the majority of their operations are. in the United States, will follow.”
He said that if companies like Arm are not listed in the United States, they “will simply be acquired by better capitalized and better rated American competitors”.
Changes to UK stock market rules and proposed reforms to free up large sums of money held by the pensions industry have failed to stem the flow of UK businesses going overseas.
LSE chief executive David Schwimmer said last week: “There is no magic bullet in terms of radically changing the market environment.”
And Hargreaves Lansdown analyst Susannah Streeter said Wandisco’s planned New York listing showed “how enticing Wall Street is”.
She added: “Sentiment remains strong that investors in the US have more appetite for high-growth companies, which is helping to drive up valuations, despite the resilience of the London market in recent months.
“The city has pedaled hard to attract new IPOs with the help of the government’s upheaval in listing rules, but it’s an uphill struggle.”
Streeter added that as concerns grow about the global economy, “companies are more likely to take their chances in New York for their public future.”
Wandisco said it had “long stated” its intention to consider additional listing in America.
The company added that it “remains committed” to retaining its London listing.