Investment groups caution over ‘shortcuts’ in listings review

In Silicon Valley, companies such as Facebook use dual class shares

Credit: AP

Lord Hill’s review said: “It is clear that the current listing regime is in need of reform. Tthere are signs that the lack of flexibility in the premium listed segment in particular is playing a part in driving business to our competitors.”

Last year, the float of the Hut Group saw it left out of the premium market segment due to its founder’s special share class that allows him to block hostile takeovers.

Recommendations to allow dual class shares were also made by a review of the UK’s fintech sector by former Worldpay boss Ron Kalifa, published last week.

Charlotte Crosswell, chief executive of Innovate Finance, said: “Unlocking barriers to UK listings is critical to retaining our most exciting companies.”

Robin Klein, co-founder of venture capital fund Latitude, said: “It is fantastic to see a string of announcements coming out of Whitehall demonstrating London’s ambition to remain one of the world’s best capital markets.”

However, Mr Dallas warned: “If you protect companies from accountability the temptation is for them to service the private interests of the controlling owner. It is disappointing. It looks like the train has left the station.”

The review also recommended the UK ease rules around special purpose acquisition companies, or SPACs. These blank cheque companies have surged in the US and have raised more money in 2021 so far than traditional floats. 

However, investors Ivan Sedwick, investment director at LGB & Co, said: “caveat emptor — buyer beware — ought to apply”.