AIM-listed biotech firms face crunch votes on London Stock Exchange exits
Two City tech firms are braced for crunch votes to determine their futures this week as shareholders decide whether to bump them off London’s beleaguered stock exchange.
Redx Pharma and C4X Discovery have scheduled general meetings to vote on proposals for delisting from the London Stock Exchange’s junior Aim market and transitioning to private status.
C4X Discovery is seeking investor approval for its delisting on Monday at Panmure Gordon’s office in London while Redx Pharma shareholders will gather at the company’s Bishopsgate offices on Friday.
Redx Pharma, based in Cheshire, announced its intention to go private two weeks ago, saying liquidity constraints on the Aim market are blunting its valuation. The company also pointed to share price volatility, challenges in accessing financing, and the high costs of maintaining public company status.
Jane Griffiths, chair of Redx, said the decision came following an extensive review, where its board had “unanimously concluded” that the decision was in the best interests of the company and its shareholders.
“Despite completing some of the largest AIM capital raises for biotech companies in recent years, Redx is still liquidity constrained on AIM,” she wrote in a notice to the stock market.
“The board believes that as a private company we can access a broader universe of specialty investors and, accordingly, a larger quantum of future funding required to execute our strategy and maximise our value in the interests of all our shareholders,” she added.
The board needs a 75 per cent to vote in favour of the move to succeed.
Similarly, C4X Discovery, headquartered in Manchester, revealed its plans to depart from the London Stock Exchange’s AIM market at the end of March. The company blamed its decision on the recent downturn in financial markets, which weighed on its share price and future fundraising prospects.
If approved, the transition will take effect on April 26.
It comes amid a bleak period for the London Stock Exchange’s younger market, established in 1995 to help smaller, burgeoning companies secure capital for growth with reduced regulatory constraints and expenses.
Aim has been drowning beneath a wave of takeovers, with a 75 percent increase in the past year, hitting its highest level in 12 years.
The number of listed firms on AIM has declined by 30 percent since Redx’s debut in 2015, with 78 cancellations last year alone.
Alasdair Haynes, chief executive of challenger stock market Aquis, told CityAM last week: “The London stock exchange is all about winning today’s unicorns, but AIM should also be about getting growth businesses. The problem that I think they have is that their model really hasn’t changed for 30 years.”