UK launches charm offensive to try to secure Klarna shares listing

By

Sandra Halliday

Published
Feb 3, 2022

The London Stock Exchange (LSE) has missed out on a number of high-profile IPOs in recent periods and with buy now, pay later giant Klarna planning to list its shares, the British government has launched a charm offensive to try to get it to list in London in the wake of the problems caused for The City by Brexit.

The government is worried that the $45 billion company could list its shares in New York and ministers met executives from the Swedish business on a call this week, along with other European technology companies, urging them to float in The City instead.

Unfortunately the plan for Prime Minister Boris Johnson to be at the meeting was derailed as he had other commitments due to the Partygate scandal. But other senior ministers attended, along with the chief executive of the London Stock Exchange.

Reports have suggested that private companies with valuations adding up to more than $100 billion were scheduled to attend, including the payments business checkout.com.

The London Stock Exchange remains one of the world's leading locations for share listings, but it has lost out on a number of big tech names in recent periods. Farfetch, for instance, chose to list in New York, despite being based in London. And outside of the tech sphere, Pepco, which has a major UK arm and whose chief executive is British, listed in Warsaw.

New York is the biggest threat to London and attracted the lion's share of the $92 billion in listings last year. Technology companies raised only a relatively small £6.6 billion in the UK in 2021.

And some tech companies that have listed in the UK have faced issues with share prices that have plummeted after their IPOs. These include THG and Deliveroo. Non-tech firm Dr Martens also saw its share price falling post-IPO. 

All of the companies on the call with Downing Street were UK-based, except for Klarna. And if London wins its business, it would be a huge coup for the LSE.