UK sees first big IPO in months​

By Jake Rickman​

What do you need to know this week?

UK fintech company CAB Payments went public last week in what was the UK’s first major IPO listing this year.

CAB Payments raised £300m through the listing, offering investors £3.35 per share. However, by market close, the value of the shares fell nearly 10% to £3.03 per share.

No doubt, CAB Payments' decision to list will come as welcome news given the series of setbacks facing the London Stock Exchange, which has in recent months seen UK-based semiconductor startup Arm opt to list in the US rather than the UK. Likewise, soda ash producer WE Soda abandoned its IPO last month, citing market conditions and investor undervaluation.

Why is this important for your interviews?

We have previously looked at the challenges facing the UK’s equity capital markets in recent times. Companies are shying away from listing in the UK due to a variety of factors, including:
  • Uncertainty about the strength of the British economy arising from inflation and uncompetitive interest rates compared to other markets;
  • Corporate governance concerns;
  • Fears that Brexit may result in unpalatable regulatory divergence between the EU and the UK; and
  • The perception that the United States is more favourable to public companies than the UK.
The fact that CAB Payments decided to list in the UK may quell speculation that the UK is no longer fit for IPOs. However, the fact that CAB Payments’ shares fell following the listing underlies that market confidence remains dampened.

Accordingly, if you are interested in equity capital markets, including IPO work, it is worth researching this listing in more detail. To guide your research, you can view CAB Payments’ listing prospectus and fact sheet via financial broker Hargreaves Lansdown’s information page.

How is this topic relevant to law firms?

Allen & Overy advised CAB Payments on its listing.

Linklaters advised JP Morgan and Barclays, which served as the book runners and global coordinators, with JP Morgan also serving as the sponsor CAB Payments' sponsor in the IPO process.