Having put itself up for sale in February, the group had hoped to secure a takeover offer that would safeguard its future, but announced today that it not received any acceptable offers and will begin to wind down over the next six months. The protracted wind-down process is designed to mitigate any market disruption that the closure might cause.
Plus was launched as a challenger to the Alternative Investment Market (AIM), which is owned by the London Stock Exchange. As of April 2012, Plus listed 156 companies including brewer Shepherd Neame, and football club Arsenal. The exchange has been in difficulty of late: turnover in the six months to June 30 2011 was just £1.46m, and losses in the same period were £1.4m.
Losses aside, upcoming new regulatory capital requirements are putting pressure on the market too, and it doesn’t have enough money in the kitty to sustain itself. The concerns prompted a board decision to inform the FSA of its impending closure. Plus has said it will ‘work to ensure’ that companies traded on its market are able to find an alternative medium for trading their shares. Remaining assets will still be available for sale during the wind-down period, as shareholders will certainly be hoping to recoup at least some of the value of their investment.
It’s not plain sailing for other stock markets however. Players on all sides are struggling in a pretty volatile marketplace: stock exchanges fell all over the world just this weekend. But at about nine times the size - AIM has more than 1,250 companies listed – and with the clout of London Stock Exchange behind it, perhaps AIM was always going to emerge victorious…