For a smaller company, the case for a stock-market listing is easy to understand. It can raise capital, give shareholders a way to trade and attach a visible price to the business. The costs are accepted as part of the deal. In London, however, that calculation is becoming less comfortable.
Just one example is Devolver Digital which left AIM on 16 September after deciding the listing no longer added up. The video-game publisher said the move would save about $1.6m a year. It also cited thin trading and the management time required to remain public. Becoming private, it said, would allow its teams to “focus on the long term health of the company” rather than the demands of the public market.
“The bigger issue isn’t the cost of being public – it’s the value companies are getting from being public,” says Steven Fine, CEO of investment bank Peel Hunt. He says weak valuations are making UK-listed businesses attractive to private equity firms and overseas buyers.
When the listing stops paying
The calculation gets more difficult when a company needs cash. Futura Medical raised about £1.8m in September at 0.2p a share, a 37.6% discount to its previous closing price. The deal lifted its share count from about 581m to 1.48bn. At the same time, the board launched a formal sale and M&A process, saying its market valuation did not “adequately reflect the strategic value and commercial potential of its portfolio”.
The valuation gap also shows up in takeovers. By the end of August, the median UK public M&A bid premium in 2026 was 33.8%, according to Singer Capital Markets. Some 59% of companies in an offer period had an undisturbed market capitalisation below £500m. Gamma Communications’ board recommended a £1.015bn cash offer from Epiris at a 53% premium to its undisturbed share price.
When buyers are willing to pay substantially more than the market, while raising fresh equity can heavily dilute existing shareholders, boards have reason to question what the listing is delivering in return.
More options without a listing
There are still good reasons to remain public. “For companies with a clear equity story and compelling investment case, capital remains available,” according to Fine, pointing to recent oversubscribed fundraises. He adds changes to the prospectus regime have made equity raising easier, although stronger domestic investor demand is still needed to improve liquidity and valuations.
Private companies now have more options too. Wayve completed an $85m employee tender through the London Stock Exchange’s Private Securities Market in July. Later that month, Moneybox used the same market to run a £45m employee liquidity auction without going public. COO Karen Kerrigan said it allowed the company to provide liquidity while “retaining control over how and when liquidity is provided”.
Neither transaction raised new growth capital. But they show that companies can now offer some shareholder liquidity without a flotation.
London’s problem is not only how to persuade more companies to float. The more revealing measure may be how many decide not to leave.
For a smaller company, the case for a stock-market listing is easy to understand. It can raise capital, give shareholders a way to trade and attach a visible price to the business. The costs are accepted as part of the deal. In London, however, that calculation is becoming less comfortable.
Just one example is Devolver Digital which left AIM on 16 September after deciding the listing no longer added up. The video-game publisher said the move would save about $1.6m a year. It also cited thin trading and the management time required to remain public. Becoming private, it said, would allow its teams to “focus on the long term health of the company” rather than the demands of the public market.
“The bigger issue isn’t the cost of being public – it’s the value companies are getting from being public,” says Steven Fine, CEO of investment bank Peel Hunt. He says weak valuations are making UK-listed businesses attractive to private equity firms and overseas buyers.
