Goldman Sachs-Backed Petershill Partners to Delist from London Stock Exchange
Petershill Partners, a Goldman Sachs-backed investment vehicle, is set to delist from the London Stock Exchange (LSE) after struggling to gain investor traction. The decision marks another setback for the London market, with the transaction valuing the company at approximately £3.4 billion.
Reasons for Delisting
Executives at Petershill Partners cited that the company's share valuation on the index "has not appropriately reflected the quality and underlying value of the company’s assets, its strong financial performance and attractive growth prospects." The company, which debuted on the stock market in 2021, specializes in providing retail investors access to private equity and hedge funds. However, it has traded at a significant discount due to economic uncertainty and higher borrowing costs.
- Share price didn't reflect underlying asset value.
- Economic uncertainty and high borrowing costs.
- Difficulties attracting investor interest since its IPO.
The Delisting Plan
Petershill intends to return $921 million (£685 million) to shareholders as part of the delisting process. Shareholders are expected to receive around 308p per share cancelled, subject to approval at a meeting scheduled for November. The exit price represents a premium over the previous closing price, leading to a surge in Petershill Partners shares following the announcement.
Impact on the London Stock Exchange
The delisting of Petershill Partners adds to the challenges faced by the London Stock Exchange, which has struggled to attract new listings and retain existing ones. Several companies have chosen to list on rival stock markets or have been taken private in recent months. This trend raises concerns about the competitiveness of the London market in attracting and retaining major corporations.
“The delisting would be another blow to London’s stock exchange, which has struggled to attract new listings.” - Chris Ratcliffe/Bloomberg News
Broader Market Context
The challenges faced by Petershill Partners reflect broader trends in the private equity industry, with investors increasingly favoring larger firms like Apollo and Blackstone over smaller players. Higher interest rates have also made it more difficult for private equity firms to raise money and sell assets. Despite these headwinds, Petershill Chairman Naguib Kheraj stated that investors are shunning smaller stocks.
Other Key Financial News
Alongside the Petershill Partners announcement, other financial news includes:
- US economy expanded by 3.8% in Q2, revised upwards from 3.3%.
- H&M reported higher-than-expected profits.
- Co-op revealed a cyberattack cost the company £80 million.
