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February 3, 2012 7:52 pm
Plus Markets Group has called time on its aim to establish itself as London’s primary exchange for fledgling companies by putting itself up for sale.
The Aim-quoted bourse formerly known as Ofex said on Friday it was looking for buyers or major strategic investors, after spending more than four years trying to build on winning Recognised Investment Exchange status from UK authorities.
The exchange is home to some 159 companies including Arsenal Football Club, brewer Shepherd Neame and Quercus, publisher of the Stieg Larsson “Millennium” Swedish detective trilogy, but has experienced continuing losses and dwindling listings in recent years.
Its second-largest shareholder, Amara Dhari Investments, a Middle Eastern syndicate, has pressured the group to shake up its board, and Giles Vardey stepped down as chairman in November.
Under Cyril Théret, its chief executive for the last two years, Plus has tried to expand beyond its core market as a narrow exchange for listings of microcap stocks, into new markets such as derivatives trading and trading technology.
A wave of incoming regulatory change in the US and Europe will push more off-exchange derivatives trading on to electronic marketplaces and Plus has created new derivatives products for investors to trade. Take-up, though, has been patchy.
“The board believes that it is in the best interests of the company to seek a partner which will help it achieve the scale and reach required to maximise value to stakeholders,” Plus said.
Potential buyers could possibly face higher regulatory capital requirements under proposals from the Financial Services Authority. The UK authority wants to force the institutions it regulates to increase the amount of liquid assets they hold as a safeguard against market stress. Turnover at Plus in the six months to June 30 2011 fell from £1.53m to £1.46m, although interim pre-tax losses narrowed from £2.5m to £1.4m. The group had £4.6m of cash on its balance sheet as of June 30.
Plus is expected to meet the FSA’s proposed requirements but will be aided by the closure of its retail trade reporting service, over which it fought a long battle with the London Stock Exchange, earlier this month. The service did not generate any revenues, Plus said last year.
The sale of Plus will be conducted by Wyvern Partners, a London corporate advisory boutique. Change of control of the exchange would require FSA approval.
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