Hammonds and Memery Crystal float on AIM high as IPOs hit record levels

Memery Crystal float on AIM high as IPOs hit record levels” />As AIM celebrated its ninth birthday last weekend, the junior market continued to outperform its full-list older brother. According to London Stock Exchange figures, the total number of initial public offerings (IPO) on AIM in the first five months of 2004 has already exceeded the total completed last year. The total number of flotations on AIM in 2003 was just 66 compared with 68 for the period between 1 January and 31 May 2004.

Not surprisingly, these statistics are supported by a general feeling of optimism among those law firms focusing on AIM-related work. Head of Travers Smith Braithwaite’s corporate practice Chris Hale said: “My sense is that it’s quite a lot busier.”

According to statistics compiled by the AIM & Ofex Deal Monitor, Travers has already advised on four AIM deals this year, putting the firm in joint second position with Lawrence Graham (see table).
This is a massive achievement for Travers, which failed to make it into The Lawyer’s AIM survey published last November (The Lawyer, 10 November). Not only did the City firm get points for quantity, more importantly it advised on AIM’s biggest deals.

Travers advised on the groundbreaking accelerated IPO of Torex Retail and also that of The Lawyer’s parent company Centaur Holdings, valued at £22.5m and £134m respectively. Meanwhile, Travers also scooped its first instruction from Cazenove, the nominated adviser on the Dealogic IPO. The instruction was a major coup for the firm because historically the bank has been advised on its own account work by Slaughter and May.

AIM specialist Memery Crystal comes joint first with Hammonds, with both firms advising on five AIM deals. Hammonds, however, easily beats the former based on deal value. According to the AIM & Ofex Deal Monitor figures, Memery Crystal advised on £12.25m worth of AIM deals compared with Hammonds’ £24.25m.

Memery Crystal corporate partner Lesley Gregory agreed that AIM activity has picked up and argued that it is the market of choice for larger international companies.

However, she predicted a fall in the number of companies seeking AIM listings over the summer. She argued that this is because investors have reached saturation point. “Investors just want some breathing space and obviously they’ll also want to realise some of their investment,” said Gregory. She said that another disadvantage of AIM listings is liquidity and the ability of investors to sell their stock.
Nonetheless, she argued that activity will pick up again in the autumn and predicted a surge of activity in September.

Hugh Maule, a corporate partner at Lawrence Graham, which came joint second in the survey, remained optimistic and noted that AIM is increasingly the market of choice. He argued that this is because the rules that apply to AIM companies are significantly more flexible than those applying to the main market. “Unless an acquisition constitutes a reverse takeover, the AIM company does not need shareholder consent – I think rules like that are beginning to dawn on advisers,” said Maule.

Law firms advising companies making a debut on AIM* between 1 January and 20 May 2004
Rank Law firm No of deals
=1 Hammonds 5
=1 Memery Crystal 5
=2 Charles Russell 4
=2 Lawrence Graham 4
=2 Travers Smith Braithwaite 4
=3 Berwin Leighton Paisner 3
=3 Blakiston & Crabb 3
=3 Gateley Wareing 3
*New issues include introductions and first share issues
Source: AIM & Ofex Deal Monitor