By Charlie Conchie
City tourism company London Tunnels decided to snub the capital for its listing after a lack of interest from UK investment banks and a charm offensive from Dutch adviser ABN Amro.
London Tunnels, which is looking to raise around £30m to fund the conversion of a complex of World War II-era tunnels underneath the capital, said in January it would be looking to float on the London Stock Exchange this year.
However, the company revealed today that it had changed its mind and would now be looking to list in Amsterdam next week.
The move will strike a blow to the London Stock Exchange after a dearth in new listings over the past two years. Just 23 firms floated in London last year, down 40 per cent on an already quiet 2022.
After publishing its intention to float [ITF] with the London Stock Exchange in January, London Tunnels was courted by ABN Amro and said a warmer reception from advisers in Europe had driven the decision to ditch London.
“After publishing an ITF earlier this year, the company received significant interest from several global investment banks,” said a London Tunnels spokesperson. “After much consideration and discussions with its investors, the company subsequently appointed ABN Amro as its Listing Agent and selected Euronext for a direct listing.
“The appointment of ABN Amro will help the company in accessing the equity and debt capital markets.”
Developing the Tunnels to full scale launch will take “a number of years”, London Tunnels said, but it hopes to launch the experience in 2027.
It has secured approval from the City of London Corporation for its plans but is still waiting for the green light from authorities in Camden.
Up to £150m may be needed to fully convert the sprawling Kingsway Tunnels into a tourist attraction. The network was developed during the Blitz and was later converted into a spy hub housing the forerunner of MI6.
However, the rationale for opting for Amsterdam over London was criticised by some in the City.
“London Tunnels stated reason for switching the listing indicates that London-based investors were either not interested in investing in the amount concerned or at the valuation they were looking for,” said Alasdair Steele, a corporate Partner with law firm CMS.
“Investment decisions are taken for all sorts of reasons and, in the light of the recent fundraisings by National Grid and Great Portland Estates, it is clearly not the case that there is not the money to invest in London.
“Advisers would have been counselling investors before taking on the mandate, so it clearly was not something people wanted to do six months or so ago. The decision to change track must have been made some time ago – the listing process takes the best part of three months wherever you go.”
London Tunnels’ move follows a string of companies switching their London listings or snubbing the capital as an IPO venue in search of better returns overseas, including chipmaker Arm, gambling group Flutter and building materials supplier CRH.
“London’s attempts to win new deals and attract fresh capital flows will inevitably have its lumps and bumps along the way,” said Russ Mould, investment director at AJ Bell, noting the relatively small size of London Tunnels’ planned IPO.
