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Financial spread-betting broker London Capital Group Holdings (LCG) have announced that they intend to remove their shares from the London Stock Exchange’s AIM market.
The decision to seek shareholder consent to end trading in the company’s ordinary shares was made after talks with representatives from GLIO Holdings, which holds a majority of LCG stock, and appears to have been based on a number of factors, including the ongoing cost of supporting AIM trading and the limited level of liquidity in LCG’s ordinary shares. The company has also recently been admitted to the NEX Exchange growth market and it seems that GLIO have decided that NEX is a better market for LCG shares.
At this stage, LCG have not announced when the delisting will occur but have said that a general meeting of shareholders will be convened during the next few weeks. When the meeting takes place, a resolution to cancel trading of ordinary shares with AIM will be proposed. For the proposition to succeed, it will require the support of no less than three-quarters of voting shareholders, but as GLIO hold 78.14% of LCG’s issued shares and have already indicated that they will be supporting the de-listing, the outcome of the shareholder vote appears to be a foregone conclusion.
This move is not a major surprise, given that earlier in the month LCG announced that it was listing shares on the NEX market, which focuses on new and growing companies and has been described as ‘London’s other stock exchange.’ Early reaction to the news on the markets was negative, as LCG shares dropped in value by nearly 50% on Friday.
Although a number of factors have been cited for the move, the main motivation appears to be to cut costs. It is significantly cheaper to maintain a presence on NEX than on the AIM exchange, and the level of trading activity in its shares over the last year had been disappointing. De-listing can also be seen as the latest stage in an overhaul of LCG begun under new CEO Charles-Henri Sabet three years ago.
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