Wed. Dec 1st, 2021

London’s stock market has attracted its first special purpose acquisition company since the government revised rules in an effort to compete with Wall Street as a destination for a much-discussed blank check company.

Venture capital firm Hambro Perks will aim to raise up to £ 150 million for a London-listed acquisition vehicle. The Spac will then be used within 15 months to merge with a fast-growing private European technology company, Hambro Perks said on Tuesday. It aims for a £ 2bn deal, including debt.

Opting for London will be seen as a boost to the UK government’s efforts to rejuvenate the stock market, which has struggled to compete with New York as a venue for both Spacs and technology companies.

Last year, the government instructed Lord Jonathan Hill to draw up new rules to make listing on the UK public market more attractive. Until now, however, blank check companies have still opted for New York or, in much smaller numbers, Amsterdam, which has become a center of European Spac activity this year.

Dominic Perks, CEO of Hambro Perks, told the Financial Times that changes to the Spac regime were “crucial” in bringing the company to the UK market. “We looked at the USA, we looked at Amsterdam, but London was ready for us. “The changes to the rules have opened up the market,” he said.

Hambro Perks would bring a European technology champion to the UK public market, he added.

“We’re seeing some really high-quality technology firms in the UK and Europe. It’s exciting to see the London market evolve from here… [and] not losing some of the fantastic companies already based here, ”Perks said.

Founded in 2013, Hambro Perks already owns interests in more than 100 companies, including Gelesis, What3words, PrimaryBid, Moneybox and Vedanta Biosciences.

The government’s efforts to address the Spac mania drew criticism after a spate of scandals and regulatory investigations in the US slowed the market after attracting tens of billions of dollars earlier this year.

The Spac is the first to be launched on the London Stock Exchange with a structure that reflects the Financial Conduct Authority’s new rules that went into effect in August, based on Hill’s recommendations.

Under the new regime, trading in a Spac’s stock no longer needs to be suspended after a potential acquisition is announced, as long as investors have barred their funds and get a vote on any transaction.

Such procurement vehicles have previously been able to operate in London, but have been restricted by rules that have made overseas markets more attractive to potential investors.

Several high-profile British technology companies, such as The Hut Group, have endured a difficult time in the public markets this year, raising doubts as to whether the UK market is the right home for fast-growing but often unprofitable companies.

Citigroup is the only bank working on the Spac with legal advisers from White & Case and Carey Olsen.

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