The value of companies taken private last year around the world reached record levels and has almost trebled since 2004. Public-to-privates in 2006 amounted to $150 billion (€113 billion), compared to $58.9 billion in 2004, according to research by Thomson Financial.
The record numbers were driven by US businesses worth almost $97 billion delisting. UK companies ranked second in the stampede from public markets accounting for $27 billion of public to private transactions.
The public-to-private phenomenon resulted in a de-equitisation of US markets. The New York Stock Exchange reported a net withdrawal of listed capital of $38.8 billion, an increase on $27.3 billion in 2005. Companies worth $67.3 billion left the New York Stock Exchange. Initial public offerings on the New York Stock Exchange hit $28.5 billion, up from $26.2 billion in 2005.
Bankers blame the knot of Sarbanes-Oxley-inspired regulatory red tape for driving businesses away from the US exchange.
The London Stock Exchange and its junior market AIM, however, proved an attractive destination for companies seeking capital. The UK’s public markets enjoyed a net inflow of quoted capital of $28.4 billion, in spite of a similarly mature private equity industry.
Initial public offerings more than doubled on The London Stock Exchange to $47.5 billion, from $23.2 in 2005. Public-to-private deals meanwhile fell to $19 billion, compared with $27.7 billion in 2005.
The healthcare sector raised the most capital in public-to-private deals at $42.9 billion. High tech came second with $27 billion while the financial sector raised the least at $1.9 billion.