PLUS Markets Group

12/09/07 17:10

Formerly known as OFEX, PLUS Markets Group has been working hard over the last few years to establish itself as a viable alternative to the London Stock Exchange’s Alternative Investment Market (AIM) for the small and growing businesses.

To support this, PLUS has now been granted Recognised Investment Exchange (RIE) status by the Financial Services Authority, making it a fully-fledged stock exchange with the same rights and privileges.

What is PLUS?

PLUS Markets Group is a double headed beast. On one hand it provides a platform that enables investors to trade stocks that are already listed on any UK public market, including the LSE and AIM. Companies taking advantage of this equity market service are ‘PLUS traded’ stocks. At the same time it also operates as an independent stock exchange providing businesses like yours with a means to raise up to £10m via flotation. Companies that list on the market are known as PLUS quoted.

Floating your business on PLUS

The advantage that the PLUS offers over AIM is that it is considerably cheaper both to join the market via an Initial Public Offering (IPO) and maintain a listing. The regulatory burden is also lighter than on AIM, which is itself celebrated as a ‘light touch regulation’ market.

Both AIM and the PLUS Market are seeking to attract fast growth companies, but there are some key differences between the two markets. Chief of these is that PLUS primarily attracts individual investors while AIM has increasingly become a forum for institutions seeking to add high risk/high return shares to their portfolios. This is changing to an extent but may take time. Institutions are beginning to recognise the potential of PLUS for clients looking to raise profile by going public on a market not as crowded as AIM. RIE status will certainly assist the elevation of PLUS in institutional fund managers’ minds.

Pros and cons

The PLUS Market provides many of the same benefits as any other public market. You can raise cash, raise your profile and use shares to buy other companies. However, without the same degree of institutional investment there is less liquidity on the PLUS Market than on AIM at present and the latter arguably offers more in terms of profile, if you can succeed in your battle for air space with other AIM companies.

How to join

In order to undertake an IPO on PLUS you have to appoint a corporate adviser approved by the market. You will also need audited accounts and working capital for 12 months. The adviser will help you prepare a prospectus if you are planning to raise more than €2.5m or in the case of smaller sums, an admission document. The average cost of listing (including adviser fees) comes in at around £150,000 compared to £350,000 to £1m for a place on AIM. It is also possible to join the PLUS market through a private placing or (for those who don’t want to rise cash) an introduction.