The London Stock Exchange (LSE) has published rules for the new “High Growth Segment” of the LSE. This segment is targeted at high growth UK and European businesses that want access to capital, as well as a stepping stone to LSE’s Main Market. The High Growth Segment is open for applications from advisers, and from companies seeking admission, from March 27, 2013.
The High Growth Segment is intended for issuers valued at £300-600 million with revenue growth of at least 20% over the previous three financial years. Not surprisingly given these metrics, one of the purposes of the new segment is to attract issuers – and in particular technology companies - that would otherwise go public on Nasdaq. In this vein, the new segment will allow companies to go public with a free float of just 10% of their shares, in line with Nasdaq, rather than the 25% required of LSE Premium segment companies. For now, the new segment is only available to issuers that are incorporated in the EEA (European Economic Area). Investing companies and mineral resource exploration companies will not be eligible.
Given these limitations, the Alternative Investment Market (AIM) will still be the preferred route to the LSE for smaller technology companies that are incorporated in the U.S., Canada or elsewhere outside the EEA.