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NEWS IN BRIEF
Hammonds offers cheap
Fundraising takes a hit
A survey conducted by
delisting from AIM
research group Prequin
shows that the first three
months of the year was the
lowest fundraising quarter
for private equity since U
K law firm Hammonds has offered to “The worry is that companies will come off
delist companies from AIM for a flat AIM for the wrong reasons, and what was once
fee of £5,000, which could be bad a simple decision made on economic grounds,
2003. Prequin interviewed news for shareholders. becomes more complex and more expensive.
1,673 fund managers across One of the biggest objections to the service However advisers are alive to the risk and
the world, of which only 71 is the threat to minority shareholders. In order are being cautious.”
funds achieved a final close, to implement a straightforward delisting,
raising an aggregate $45.9 a 75 per cent shareholder
billion (£30.7 billion). approval is required.
Andrew Wright, head of
M&A at lowest point public markets at law firm
since 1992 Cobbetts, comments: Despite
UK M&A has dropped to its “There is a concern the potential
lowest level since 1992 that majority problems with the
while private equity values shareholders can service, Wright observes that “essentially
have fallen by 85 per cent, force a delisting and Hammonds’s offer is a good idea, if done for
according to professional disenfranchise other shareholders.” the right reasons”. He adds tthat entrepreneurs
services firm Grant Thornton. This potentially leaves majority shareholders shouldn’t be too despondent about the London
In the first three months of open to legal liability. “Companies may be Stock Exchange’s platform for fast-growing
this year, UK-based firms tempted to bring actions under the new companies: “A lot of foreign markets are
were the targets of 422 Companies Act, which protects the interests envious of the success of AIM, it’s a great
M&A transactions valued of all investors,” says Wright. market that is well regulated.”
at £54.1 billion, which
is about half the number
recorded in the first
quarter of 2008, when 791
Asset-based lending wins support
transactions worth £23.1
billion were announced.
as businesses face credit squeeze
UK government
debt rockets
Bank rescues and other
support operations caused
by the financial crisis have A
recent study of UK accountants, commissioned by
alternative finance specialist Venture Finance, has revealed
that the number of businesses being refused credit by banks
caused a steep increase has trebled this year.
in government debt. Peter Ewen, Venture Finance managing director, comments:
The Office for National “Our research lifts the lid on the state of British business in these
Statistics reveals that net challenging times.”
government borrowing in The research is based on interviews with 1,000 accountants, and
2008 was equivalent to 5.4 indicates that credit restrictions are stimulating increased interest in
per cent of gross domestic alternative forms of funding such as asset based lending (ABL),
product, compared with 2.6 with 64 per cent of respondents giving a positive feedback on ABL.
per cent in 2007. This Says Ewen, “As the UK economic slowdown continues, it’s
exceeds the three per cent reassuring to see that nearly two-thirds of business owners are
guideline limit for net responding proactively by seeking robust and responsive alternative
government borrowing of sources of funding like invoice and ABL.”
three per cent, as stipulated “However, it surprises me that the government isn’t doing more to
in the Maastricht Treaty. highlight this option to businesses both big and small,” he adds.
Mergers & Acquisitions 7
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