London Stock Exchange to boost retail offer with PrimaryBid deal

11 June 2024, 14:25 | Updated: 11 June 2024, 15:45

The London Stock Exchange is in talks about a deal to boost its offering to retail investors by taking over parts of PrimaryBid, one of the hottest British fintech start-ups of recent years.

Sky News has learnt that the LSE is in advanced discussions to license the retail capital-raising technology pioneered by PrimaryBid, as well as its regulated dealmaking activities and key UK operations.

Alongside its discussions with the LSE, City sources said that Sir Donald Brydon, the veteran businessman who used to chair the stock exchange's parent company, is to 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 pure-play technology business.

The London Stock Exchange Group (LSEG) has already been a small shareholder in PrimaryBid for several years.

PrimaryBid's talks with the LSE come in anticipation of final reforms to the UK's listing and prospectus rules aimed at making the London market more attractive to issuers and investors.

The Financial Times reported this week that a decision by the City regulator to move forward with changes including collapsing the London market's premium and standard listing segments into a single category could be in place as soon as next month.

A review undertaken by Lord Hill, the former EU commissioner, in 2021 concluded that retail ownership of the stock market was at its lowest level for decades.

One source close to the LSE said that a deal with PrimaryBid would represent a logical extension of its objective of promoting greater retail access to markets.

Buying parts of the fintech is expected to result in deal origination and operational synergies, the source added.

The price that the LSE intends to pay for the parts of PrimaryBid it intends 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 towards becoming a software-as-a-service technology business.

It has mothballed its UK direct-to-consumer offering, and in the process let go of a number of UK-focused staff.

Founded in 2016, PrimaryBid set out to democratise retail investing by aggregating retail investors' stock orders into more substantial amounts.

The fintech enjoyed huge success during the pandemic, when London-listed companies raced to raise capital to strengthen their balance sheets.

These included Compass Group, the contract caterer, Aston Martin and ASOS, the online fashion retailer.

PrimaryBid has since expanded into overseas market in France and the US, but has been impacted by the protracted dearth in London flotations.

Paradoxically, the deal, if it proceeds, could be auspiciously timed for the LSE, with a series of new listings in the pipeline.

On Tuesday, Raspberry Pi, the low-cost computer maker, saw its shares soar on its London stock market debut.

PrimaryBid is backed by a number of other high-profile investors, including SoftBank's Vision Fund.

Both PrimaryBid and the LSE declined to comment.