Microsite launched to give insight into public to private deals

As more quoted companies become open to private equity as an alternative source of funding in the current economic climate, corporate finance advisers at BDO LLP have launched a new microsite detailing the views and intentions of public companies, fund managers and private equity investors towards public to private (P2P) transactions.

The launch of the microsite follows the completion of a unique survey into attitudes towards P2Ps and explores a range of issues that directors, non-execs and private equity investors should consider in this area. This includes how the capital markets are ignoring smaller companies, particularly those with a market capitalisation of below £100m, what companies believe will most likely maximise shareholder value and the intention of approximately one third of companies surveyed (valued up to £250m) to explore a P2P transaction.

The microsite also provides company management teams with crucial insight into what fund managers really think about the model for investing in smaller quoted companies as well as their attitudes to management buyouts in the current market. For example:

• 70 per cent of fund managers say that growth of quoted companies up to £250m capitalisation are constrained by being listed
• Approximately two thirds of companies (66 per cent) and fund managers (62 per cent) strongly agree that private equity is better at incentivising management and growing companies
• Over half of fund managers surveyed said that private equity was better at understanding and valuing smaller businesses than the capital markets

Alex White, Corporate Finance Partner at BDO, said: “There is a disturbing but widespread agreement that the market is failing most listed companies. 90 per cent of all quoted companies are capitalised at less than £500m and yet this group account for only 5 per cent of the total stock market valuation. It is no wonder that with the benefit of hindsight, one third of CEOs would not lead their company through floatation, according to our survey. The microsite is extremely useful for those looking to understand what smaller UK PLCs really think about the market and the extent to which private equity might be an alternative solution.”

To view BDO’s microsite on P2Ps, please see the following link:
http://w3.cantos.com/09/bdo-902-ny0ex?interviews.php?source=pr

www.bdo.co.uk
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For more information contact Stephanie Aneto on 020 7893 3073, Email: stephanie.aneto@bdo.co.uk