The London Stock Exchange is in negotiations over a deal to increase its offering to retail investors by acquiring parts of PrimaryBid, one of the most important British fintech start-ups in recent years.
Sky News has learned that the LSE is in advanced discussions to license PrimaryBid’s pioneering retail capital raising technology, as well as its regulated trading activities and core UK operations.
Alongside discussions with the LSE, City sources said Sir Donald Brydon, the veteran businessman who chaired the stock exchange’s parent company, will step down as chairman of PrimaryBid.
Sir Donald joined the company just under three years ago and is leaving as it transitions to becoming a purely technology business.
The London Stock Exchange Group (LSEG) has been a small shareholder in PrimaryBid for several years.
PrimaryBid’s talks with the LSE come in anticipation of final reforms to UK listing rules and prospectuses, aimed at making the London market more attractive to issuers and investors.
The Financial Times reported this week that a decision by the city’s regulator to push ahead with changes including collapsing the premium and standard listing segments of the London market into a single category could come into force as early as next month.
An analysis by Lord Hill, the former EU commissioner, in 2021 concluded that retail ownership of the stock market was at its lowest level in decades.
A source close to the LSE said a deal with PrimaryBid would represent a logical extension of its aim to promote greater retail access to markets.
The purchase of parts of the fintech is expected to result in business origination and operational synergies, the source added.
The price LSE intends to pay for the parts of PrimaryBid it plans to acquire was unclear on Tuesday.
For the eight-year-old fintech, the deal reflects its signal earlier this year that it wanted to move away from regulated activities to become a software-as-a-service technology business.
It shut down its direct-to-consumer offering in the UK and in the process laid off several UK-focused employees.
Founded in 2016, PrimaryBid set out to democratize retail investing by aggregating retail investors’ share orders into more substantial amounts.
Fintech has enjoyed huge success during the pandemic as London-listed companies rushed to raise capital to strengthen their balance sheets.
These included Compass Group, the contract supplier, Aston Martin and ASOS, the online fashion retailer.
PrimaryBid has since expanded into overseas markets in France and the US, but has been impacted by prolonged shortages in London floats.
Paradoxically, the deal, if it goes through, could be auspicious for the LSE, with a number of new listings in the pipeline.
On Tuesday, Raspberry Pi, the low-cost computer manufacturersaw its shares soar on its debut on the London stock market.
PrimaryBid is backed by several other high-profile investors, including SoftBank’s Vision Fund.
Both PrimaryBid and LSE declined to comment.
This story originally appeared on News.sky.com read the full story
