Aspen Insurance has chosen New York instead of London for its initial public offering (IPO) worth $4 billion, as reported in an article by The Financial Times.
According to people who were familiar with the decision, part of the reason were concerns surrounding valuations and stringent listing requirements in the UK.
Aspen’s listing in New York instead of the London Stock Exchange will be another blow to the UK market as many companies have already opted to either switch their listings to the US or float there in the past few years.
In the company’s comparison of listing venues, a factor that pushed management away from London was a diminishing valuation premium, over other New York-listed insurers, in recent years.
Other technical requirements in London - like a company needing to have one year’s worth of figures reaudited simply because there was a change in the auditor - also contributed.
“As the relative valuations narrowed, then the technical issues become more impactful,” said one of the people involved, further noting the greater liquidity in the US as an important factor.
People who were familiar with Apollo, a private equity group that owns Aspen, said that its base case was to relist in New York due to factors such as its historic ties, accounting basis, and how it was its biggest market.
Last month, the head of the London Stock Exchange group said that the valuations being higher in the US was a myth and offered assurances that there were no problems in the London market when it comes to liquidity.
Aspen and Apollo, as well as Goldman Sachs, Citi and Jefferies, the firms advising Aspen’s IPO, which is planned for the first half of 2024, declined to comment.
Founded in 2002 and domiciled in Bermuda, Aspen has more than half of its 1,100 employees in London and was listed in New York before it was bought by Apollo.
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