LSE plans may benefit smaller firms

MEDIUM-sized firms could be the first to cash in on the London Stock Exchange’s (LSE) proposal to set up a rival market to Neuer Markt.

LSE chairman Don Cruickshank has revealed a series of plans for the Exchange following the collapse of the Deutsche Börse and iX merger last month. Part of the overhaul includes creating a technology-orientated market, which would incorporate techMARK and the Alternative Investment Market (AIM).

One corporate finance lawyer whose firm is reputed for its AIM work, says the move would be ideal for the smaller firms already serving the market.

AIM’s fee level currently ranges from £30,000 for the most basic deals, to £150,000 for extremely complex work. But fee levels are always considerably higher for main list transactions, including techMARK.

The source adds: “It would be a big plus for the firms. There are some companies that would like to transfer [to techMARK], but they don’t want the obligations. London is in a position where it has the opportunity to fill the gap.”

Another corporate finance lawyer says: “It would be very exciting for us as a firm which is advising AIM. We are talking and keeping our ear to the ground in the City, but we would lobby for it and support it.”

Leading AIM firms include Memery Crystal, Gouldens, Taylor Joynson Garrett, SJ Berwin, Lawrence Graham and Pinsent Curtis, according to The Lawyer IPO 2000: AIM survey, published on 2 October. In the survey, Memery Crystal emerged as the leading firm, acting on 26 deals worth a total of £292.76m. Gouldens acted on deals worth £564.5m.

AIM is often viewed as an ideal market for smaller growth companies because it is less regulated than the main list. But market capitalisations are low, and techMARK is regarded by many as not flexible enough for high-growth IT companies.

Meanwhile, Neuer Markt has recently suffered a spate of poor-performing companies, delayed IPOs and scandals, resulting in a slowdown in stock performance.