The London Stock Exchange (LSE) is currently engaged in discussions regarding a potential deal with PrimaryBid, a prominent fintech start-up in the UK. According to sources familiar with the matter, the LSE is in advanced negotiations to acquire the retail capital-raising technology developed by PrimaryBid, as well as its regulated dealmaking activities and key UK operations.
In addition, it has been reported that Sir Donald Brydon, who previously served as chairman of the stock exchange’s parent company, will be stepping down as chairman of PrimaryBid. Sir Donald joined the company nearly three years ago and is leaving as it transitions to becoming solely a technology-based business.
The LSE has been a minority shareholder in PrimaryBid for a number of years. This potential deal comes as the UK’s listing and prospectus rules are set to undergo significant reforms aimed at making the London market more attractive to both issuers and investors. According to the Financial Times, the changes, including merging the London market’s premium and standard listing segments into one category, could be implemented as early as next month.
In 2021, a review conducted by Lord Hill, the former EU commissioner, revealed that retail ownership of the stock market was at its lowest level in decades. A source close to the LSE commented that a deal with PrimaryBid aligns with the stock exchange’s objective of promoting greater retail access to the markets. The acquisition of parts of the fintech is expected to bring about deal origination and operational synergies, the source added.
The exact price the LSE is willing to pay for the assets it intends to acquire from PrimaryBid remains unclear. For the eight-year-old fintech, this deal marks a shift towards its stated goal of transitioning from regulated activities to a software-as-a-service technology business. As part of this strategy, PrimaryBid has discontinued its direct-to-consumer offering in the UK and has let go of several UK-focused employees.
Founded in 2016, PrimaryBid has been dedicated to democratizing retail investing by pooling retail investors’ stock orders into larger amounts. The fintech saw significant success during the pandemic, as many London-listed companies sought to raise capital to bolster their balance sheets. Some notable examples include Compass Group, Aston Martin, and ASOS.
Although PrimaryBid has expanded into overseas markets such as France and the US, it has been impacted by the prolonged lack of London flotations. Interestingly, if the deal proceeds, it could be well-timed for the LSE, with a series of new listings expected to hit the market. In fact, Raspberry Pi, a low-cost computer maker, saw its shares soar on its debut on the London stock market just this week.
PrimaryBid boasts a roster of high-profile investors, including SoftBank’s Vision Fund. However, both PrimaryBid and the LSE have declined to comment on the potential deal.