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Abcam founder’s vote against Danaher puts focus back on UK listings regime


Jonathan Milner, the founder of UK life sciences company Abcam [LON:ABC], is set to vote against a proposed $5.7bn acquisition by US group Danaher [NYSE:DHR] and is instead pushing to list on the main market of the London Stock Exchange (LSE).

This comes as various UK-listed companies have chosen to leave the LSE in favour of a US-listing, such as Arm Holdings and more recently, Smurfit-Kappa, who are in advanced negotiations to merge with US-based WestRock [NYSE:WRK] and relocate its primary listing.

Offer does not reflect Abcam’s value

Despite various companies choosing to relocate, Milner asserts that Danaher’s $5.7bn deal, offering $24 per share, undervalues the company and does not reflect Abcam’s true worth. Milner currently owns 6.1% of the Abcam stock. He has also openly questioned the Danaher forecasts which he regards as materially different from those of his own team. Milner was on the board of Abcam until 2020.

Due to this, Milner is advocating to continue listing in the UK, indicating that he sees value in maintaining a presence on the London Stock Exchange.

“While we are seeing various UK-listed companies relocate to the US, we’re also seeing first-hand that founders like Milner understand and trust their home market, which will help build and attract a secure investor base,” said Claire Trachet, CEO and Founder of  corporate advisory firm Trachet. “He also understands that Abcam will thrive in the UK due to there being a strong appetite for biotech amongst UK-based investors.”

According to research from Statista Research Department, by July 2023, there were 1,900 companies listed on the LSE. This signalled a slight decrease from the previous month, representing one of the lowest counts within the observed timeframe.

“There is often more potential in the US compared to the UK, so when you are a tech company in Europe, there will always be the question of whether you should list in your home market or go to the US,” Trachet added. “The reason it’s so much stronger now is because the dollar is strong, I think one of the things we will see in the next five or ten years will be European governments being focused on improving their own currencies to combat this.”

Trachet thinks that while companies will be naturally inclined to list in the US due to the wealth of opportunities the country provides, UK companies also have a responsibility to maintain listings in the UK, as opting to remain in their home country could help increase investor outlook.

UK listing regime in urgent need of reform

As more companies opt to list in the US, city grandees are moving forward with plans to address the UK’s listing challenge in order to safeguard the UK’s position as a financial centre amidst low trading activity and a scarcity of companies seeking to go public in London.

This, combined with a significant positive performance from the FTSE100, having recently reached a six-week high, acts as an optimistic sign for UK companies wishing to remain listed in their home country.

Trachet says that both global and UK businesses are still looking to list on the LSE, however, until economic conditions strengthen, and investor trust and appetite is restored, the city will continue to experience a largely inactive IPO market. “It’s important that UK companies really assess whether leaving their home market is the right decision, as cross-listing on a foreign exchange can be costly and complex,” she said.

Trachet believes we will eventually see an increase in UK listings, but this won’t happen until inflation numbers stabilise and looming recession fears fade, lifting the curtain on what remains an uncertain economic outlook. In the meantime, the UK has quickly moved into an environment where companies are seeking funding from private equity vehicles or strengthening their position through M&As.

“Ultimately, the decision to stay listed on the LSE or seek a listing on a US exchange depends on a company’s specific circumstances, strategic goals, and assessment of the benefits and obstacles of each option,” Trachet concluded.

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This article does not constitute investment advice. Do your own research or consult a professional advisor.

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