Atom Bank, a UK digital lender, is looking at a list in New York that would be a major blow to London’s efforts to promote itself as a major destination for technical IPOs.
The Durham-Headquarters Atom, founded by Mark Mullen in 2013, is floating in New York through a উদ্দেশ্য 700m merger with a special purpose acquisition company founded by Wilbur Ross, Donald Trump’s former trade secretary, Sky News first reported.
The terms of the agreement would merge the digital lender with Ross Acquisition Corp II and raise about £ 150m through a so-called PIPE – a private investment in public equity.
Plans for the deal are already at an advanced stage, sources told Sky News, but there is no guarantee that the deal will move forward due to fears of a recession and rising inflation disrupting public markets.
The transfer of Atom to the public market has long been the subject of speculation, with boss Mark Mullen calling the m 75m cash injection in February “a fundamental step in our journey toward an IPO.”
The firm claimed in February that no decision had been made on a destination for the float.
The SPAC was listed last spring by Ross, who has been a prominent financier on Wall Street for decades and helped build the U.S. government’s relationship with China during his tenure in the Trump administration from 2017 to 2021.
Any deal would be a major blow to London’s efforts to promote itself as an internationally listed capital.
Politicians have launched a flurry of attacks in recent months to try to float more technology companies and fintech floating in London, with City Minister John Glenn meeting with bosses in February to sell London as a floating place.
Ras Shaw, head of Tech London Advocates, said a US listing for the firm would be “disappointing”.
Shaw added: “While the UK fintech is pleased to see Atom Bank potentially ready to be listed on the public market, it is disappointing – if true – that a SPAC (Special Purpose Acquisition Company) chooses an indigenous fintech for the listing. A list of US vs. London markets, ”he said.
“With its customer base and business anchoring in the UK, Atom Bank’s London listing will be another positive milestone in supporting and strengthening the growth of the UK’s fintech ecosystem.
Shaw Hill called on decision-makers to double the review recommendations, which include increasing London’s appeal as a listed capital last year and making London’s markets more attractive to SPAC as an alternative.
A SPAC consolidation plan for Atom comes despite slowing this year as regulators scrutinize acquisition vehicles in the United States and companies withdraw from IPOs amid market volatility.
Following the flotation frenzy in 2021, only 78 SPAC lists were issued in the three-month period ending March 31, according to the pitchbook, with the average deal size only half that of last year.
Analysts at Pitchbook say companies are coming back from SPACs amid a wider IPO recession.
“The way companies pull IPO plans instead of listing during a negative pricing environment, we believe that potential SPAC targets may delay or skip any discussions until a clear picture of the market is reached,” analysts at Pitchbook said.