“It is quite possible that companies will delist because of the focus on short-term performance and governance issues becoming heavier and heavier,” says Sir Ronald Cohen, chairman of Apax Partners, one of the best-known private equity houses.
The upsides in terms of listing include the efficiency of accessing finance. Proponents say it gives companies a stable shareholder base made up of institutional investors, which is impossible if they are unlisted. It also can deliver a higher profile that serves as a marketing tool, along with the use of shares as an acquisition currency, a market price for employee stock and options and general liquidity for shareholders. But at least some of those upsides can now be provided by private equity. With reported estimates of around $100bn raised in private equity money but yet to be invested, and private equity deals of as much as €5bn or more, large companies as well as the more classic small to medium-sized ones can now look at de-listing. Woolworths, for instance, the iconic UK retail company, recently rejected an offer from Apax valuing it at £789m.
