Many smaller British firms regret listing -poll
LONDON, Dec 16 (Reuters) - Many of Britain's smaller listed
companies, frustrated by low stock prices, may consider private
equity buyouts, and a third wish now wish they had never floated
to start with, research released on Tuesday showed.
The survey, by accountants BDO Stoy Hayward, suggests
so-called "mid-market" buyout houses may enjoy a busier 2009
than larger private equity firms, whose mega-buyouts have ground
to a halt as banks stopped providing big leveraged loans.
BDO found 69 percent of companies with a market value of
less than 250 million pounds ($381 million) felt their stock was
undervalued, and 32 percent were "fairly" or "very likely" to
consider a public-to-private deal within the next few years.
"Our survey is further evidence that a majority of smaller
quoted companies are very frustrated about their place on the
public markets," said BDO Corporate Finance Partner Michael
Cobb.
"A significant number of directors feel that it is in their
company's best interest to explore coming off the market and
obtaining private equity funding," he said in a statement.
Other considerations may also play a part: 66 percent of
respondents said the private equity funding model, which can
lead to equity stakes and hefty payouts for managers, is
"generally better than the public markets at incentivising
management".
As the credit crunch intensified, the FTSE-250 index .FTMC
has fallen more than 40 percent this year while the FTSE Small
Cap index .FTSC has lost almost half its value.
In the year-to-date, global private-equity mergers and
acquisitions (M&A) have slumped 70 percent, according to Thomson
Reuters data, against a 28 percent slide in overall M&A.
The BDO survey, conducted in September and October, was
based on interviews with 86 companies with a market value of 15
million pounds to 250 million pounds.
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