Investment platform AJ Bell is gearing up for its flotation on the London Stock Exchange and has published the price range for the new shares.
The group said it is seeking between £1.54 to £1.66 per share, giving the firm an estimated market capitalisation of £626million to £675million.
The Manchester-based group, which offers savers the chance to invest in stocks and funds through its website, surprised analysts by setting a higher-than-expected price range.
Price range: AJ Bell has said it was seeking a price range of between £1.54 to £1.66 per share
Experts had not been expecting the group’s market capitailisation to be above the £500million mark.
Final pricing is expected to be revealed on or around 7 December, with trading of the group’s shares set to go live on the London Stock Exchange or around 12 December. The group is publishing a full prospectus later today.
AJ Bell’s projected valuation makes the company cheaper on a price to earnings multiple compared to larger rival and dominant investment platform market heavyweight Hargreaves Lansdown, which has a valuation of over £9billion.
Andy Bell, chief executive of AJ Bell, said: ‘There has been significant interest in our IPO which reflects the potential for expansion in our market, the strength of our business model and our track record of sustainable growth.
‘The application period for the IPO is due to open later today and our customers will be able to apply for shares via our investment platform where they will find the prospectus to help inform their decision.’
The company confirmed the share offer would comprise ‘existing ordinary shares expected to be sold by certain existing shareholders, directors and employees’, a targeted offering to institutional investors within the UK and the offer of shares to qualifying UK-based AJ Bell customers.
In charge: AJ Bell’s boss and founder Andy Bell
AJ Bell also confirmed that each of its directors and selling shareholders will be subject to ‘customary lock-in arrangements’ in respect of their shares for a period of time following next month’s listing.
Price range: The price range at which a company expects to sell its shares when it first launches on a stock market like the London Stock Exchange. The price quoted is for one share.
Market capitalisation: In this case, the total estimated value of the company listing its shares. The market cap gives an indication of a company’s size.
Prospectus: A formal legal document which can be hundreds of pages long and covers every aspect of the proposed stock exchange listing. The rules for what goes in a prospectus are derived from EU law.
Lock-in period: A restriction that prevents those holding a company’s stock from selling the stock for a specified period of time.
Boss Andy Bell retains a 28 per cent stake in the company and is believed to be selling up to £14million worth of shares in the listing
AJ Bell, which was founded by Andy Bell in 1995, has almost doubled assets under management over the past three years to £46billion and has just under 200,000 customers.
In its most recent financial year to the end of September the company grew pre-tax profits by 31 per cent, to £28.4million.
Looking ahead, the group said in its latest results that it aims ‘to become the easiest platform to use and, in a market that is constantly evolving, our continued investment in innovative technology and our core infrastructure is critical in delivering this ambition.’
On the Brexit front, the firm remained cautiously optimistic: ‘A changing macroeconomic environment presents both opportunities and challenges for the business and we expect further market volatility for the foreseeable future with the backdrop of the UK’s exit from the EU.
‘The business has experienced a variety of economic conditions during its twenty-plus years of history, and it has always operated profitably during that time.’