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mandadeals.co.uk CAPITAL MARKETS
number of AIM stocks. I wonder to what CASH TO BURN observes that the attractions of equity
extent they do provide liquidity and How widespread such concerns are is finance can only grow.
whether the cost of them as an industry is open to debate. Evidently, many CEOs ‘Institutions do have funds to invest,’ he
worthwhile,’ he argues. are turning their attention to using the says. ‘Moreover, without the availability of
The number of companies leaving full potential of the junior markets, such bank debt, we have a situation where the
AIM is also damaging the reputation of as AIM-listed professional services firm equity markets will become a sort of exit
the market, claims Hagerty. ‘From a Tenon looking to raise £40 million to route for private equity firms.’
company law point of view, it’s possible acquire rival firm RSM Bentley Jennison. Unlike Hagerty, Taylor sees the
to demonstrate that it’s in your In fact, there are signs that confidence companies leaving AIM as a positive step.
investors’ interest to delist. But it’s easy is returning to the growth markets. On ‘Over 500 companies have delisted since
the beginning of last year. That’s a healthy
thing for the market as over half of those
‘AIM is the best example of its kind in the world,
had a market cap below £3 million. It has
but it has a lot to do in order to regain cleared out a lot of the small, possibly
the confidence of its investor base’
unsuitable companies.’
Any sensible CEO won’t be taking too
much notice of their company’s share
to forget that when people buy listed PLUS-quoted, the junior exchange price at the moment, although many will
stock, regardless of the risk warning, steered by former AIM boss Simon be reassured to see that institutions are
they generally speaking expect it to Brickles, Frontier IP recently raised just backing companies with significant sums
remain listed.’ shy of £1 million. when necessary.
Overall, Hagerty believes that AIM Chilton Taylor, head of capital The priority, as ever, will be to run
needs to shake the ‘dangerous perception’ markets at accountancy firm Baker Tilly, the business efficiently and try to grow.
that it is run for the benefits of the observes that he fully expects to see IPOs ‘In the current climate, good businesses
companies and advisers on it, rather than make a comeback next year. He draws can do better but companies that have
the shareholders. ‘The establishment great encouragement from the secondary fundamental problems will fall off a
protects itself,’ he claims. fundraising activity on AIM and cliff,’ warns Straight. ■
Mergers & Acquisitions 57
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