The previous plans of a commodity broker were for a UK IPO, but these were canceled in 2021Commodity broker Marex is considering listing in New York as it looks to revive its plans for an initial public offering, in the latest sign that the London stock market is losing its lustre.
The , a London-based group, cancelled a listing in London in 2021. It had a target valuation of $650mn to $800mn. However, it is currently evaluating both cities in preparation for a sale. This could occur in the early part of next year depending on market conditions.
In an interview, Ian Lowitt, chief executive of Marex, stated that Marex’s private equity investors were starting to revive exit plans. These could include a listing.
“What we see in 2023 creates options for shareholders. He said that the business could be offered for an IPO. Given the firm’s performance, it is something people are considering.”
Market participants anticipate that the broker’s valuation, which has been under the control of JRJ Group since 2010, by two former Lehman Brothers investment banksers, will be between $1.6bn and $1.7bn. However, advisers have not yet been formally appointed.
Marex responded to questions and said it believed that a listing could be made in either London, or New York.
The company, which trades and derivatives hedges big commodity producers and consumers for large commodities, pulled its listing plans 2 years ago due to weak market conditions. At the time, a throng new listed companies, including Deliveroo food delivery company, performed poorly.
Marex’s decision to list New York as the listing venue fuels debate about the market. This has been fueled by several companies, including CHR (the largest building materials company in the world), abandoning or reconsidering London.
InterContinental Hotels Group, owner of Holiday Inn, warned Wednesday that the UK stock exchange was ” not very attractive” to listed companies.
Marex’s listing plans were revived after it achieved record annual earnings in 2022. This resulted in Marex’s pretax profit increasing by more than half, to $121.7mn on revenues $702mn. The financial services group was able to benefit from higher interest rates and buoyant commodity markets.
In recent years, the broker has been aggressive in expanding its financial products as well as its geographic reach through several acquisitions. These acquisitions have allowed it to grow its US business as large as in Europe, and to expand in the Middle East or the rest of Asia.
Lowitt stated that he expects profits to continue increasing in the next year, as those figures will include ED&F Man Capital Markets (and selected businesses from OTCex), which OTCex completed acquisitions of earlier this year.
He said, “We have laid the foundations of a fantastic 2023 and beyond.”
Marex was one of eight companies that trade in the London Metal Exchange ring. It had to deal with market dysfunction in March 2012, when there was a crisis in nickel trading.