Sunday May 22, 2022 1:19 p.m
British digital lender Atom Bank is considering a listing in New York, which will deal a major blow to London’s efforts to present itself as a prime tech IPO target.
Durham-headquartered Atom, which was founded by Mark Mullen in 2013, is set to be swimming through a £700m merger with a special purpose acquisition company in New York set up by Donald Trump’s former Trade Secretary Wilbur Ross, Sky News first reported.
Under the terms of the deal, the digital lender would merge with Ross Acquisition Corp II and raise around £150m through a so-called PIPE – a private investment in public equity.
Plans for the deal are already at an advanced stage, sources told Sky News, but there were no guarantees the deal would go through as recession fears and rising inflation plague public markets.
Atom’s move to public markets has long been the subject of speculation, with boss Mark Mullen saying a £75million cash injection in February was “a fundamental next step in our IPO journey”.
However, the company claimed in February that a decision on a target for the IPO had not yet been made.
The SPAC was listed in the spring of last year by Ross, who has been a prominent Wall Street financier for decades and helped shape the US administration’s relationship with China during his tenure in the Trump administration between 2017 and 2021.
Any deal would be a major blow to London’s efforts to present itself as the international stock exchange capital.
Politicians have launched a charm offensive in recent months to try to get more tech firms and fintechs to hover in London. City Secretary John Glen met with bosses in February to sell London as a place to swim.
Russ Shaw, head of Tech London Advocates, told City AM that a US listing would be “disappointing” for the firm.
“While it’s great to see that UK fintech Atom Bank may be gearing up to list on the public markets, it’s disappointing – if true – to see a homegrown fintech opting for a SPAC (Special Purpose Acquisition.) listing Company) in the US decides listing on the London markets,” he said.
“With the client base and business anchored in the UK, a London listing by Atom Bank would have been another positive milestone in supporting and strengthening the growth of the UK fintech ecosystem.
Shaw urged policymakers to double down on Hill Review recommendations made last year to make London’s attractiveness as a stock exchange capital and to make London markets more attractive as an option for SPACs.
Plans for a SPAC merger for Atom come despite a slowdown this year as regulators step up scrutiny of takeover vehicles in the US and companies backtrack from IPOs amid market volatility.
After a frenzied IPO in 2021, only 78 SPAC listings were released in the three months ended March 31, with the average transaction size half the year-ago figure, according to Pitchbook.
Analysts at Pitchbook said companies are pulling back from SPACs amid a broader IPO slowdown.
“Just as companies in a negative pricing environment pull IPO plans rather than list them, we believe potential SPAC targets may choose to delay or forgo negotiations until there is a clearer picture of the markets,” they said the analysts of Pitchbook.
Atom was contacted for comment.
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The Atom Bank is considering going public after a £75m funding round
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