On 17 April 2012 the Directors of PLUS Markets Group plc put out a statement which said the following:
The deadline for indicative proposals (they’re up for sale) was 30 March 2012. A number are under consideration.
The Board hopes to be in a position to make a further announcement “in the coming weeks.”
The Board reserves the right to alter any aspect of the formal sale process..or to terminate it.
There can be no certainty that any offer will be made for the Company.
It is no exaggeration to say that this is tragic. Nobody underestimates the problems facing the directors and as PLUS Markets is a ‘Regulated Investment Exchange’ (“RIE”) one assumes that the Financial Services Authority (“FSA”) is closely involved. The market is awash with rumours (that is all they are) that PLUS Markets may be near to breaching their capital adequacy requirements.
The reason that the situation is so serious is not only for the shareholders (PLUS Market shares are traded on AIM), nor for the c150 companies whose shares are traded on PLUS Quoted (the unregulated market), but because the boffins who run the business end of the coalition government are committed to providing early stage finance for SMEs through funds rather than capital market operations.
They clearly have little understanding of how markets operate. They are happy to incur vast overheads as the new managers of the funds award themselves wonderful contracts, plush offices, terrific pensions and long holidays without any inbuilt accountability. It is simply barmy.
A vibrant PLUS Markets should be out there fighting the corner for its operations. Instead the directors are fighting for their lives.
There is a solution. Mr. Xavier Rolet please note.
There are around 1,100 companies on AIM of which just over 600 are capitalised at less that £25m.
If the LSE takes over PLUS Markets, splits AIM and joins those 600 companies with the 150 from PLUS Markets, you will have a vibrant smaller capital market which was the original intention for AIM.
There will many reasons from the markets, from the advisers, from the directors why this is not an ideal solution.
It is ideal and at the moment it appears to be the only one in town.