Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Shares in British microcomputer maker Raspberry Pi jumped more than a third on its first day as a listed company after pricing its shares at 280p, providing a boost for the UK stock market amid a dearth of flotations.
The Cambridge-based group confirmed an offer price at the top end of a range of 260p to 280p on Tuesday, implying a market valuation of about £542mn. By lunchtime, shares were up 36 per cent in conditional dealing, which is only open to certain institutional shareholders, to 380p.
Demand for the flotation, which will be open to retail investors from Friday, is a shot in the arm for London’s stock market, which has struggled to attract interest from high-growth technology firms, which prefer to list in New York. The listing caps more than a decade of growth for Raspberry Pi, which started out selling single-board computers for enthusiasts and hobbyists, and made a profit of almost $40mn last year.
Listing Raspberry Pi in London was “not a patriotic decision”, said chief executive Eben Upton: “We did take a look at New York but we realised that, for a company of our scale, the London market is probably a better home.”
Upton said there was too much gloom surrounding the UK stock market. “Many of the stories that people tell about the differences between the US and the UK — particularly this sort of magical multiple arbitrage — don’t seem to be real.”
The total offer size amounts to £166mn, representing about 30.7 per cent of the company’s ordinary shares.
Raspberry Pi said the total offer size would rise to £178.9mn if the overallotment option — in which additional shares would be made available by its majority shareholder, the Raspberry Pi Foundation — is exercised in full, representing about 33 per cent of its shares.
Russ Mould, investment director at AJ Bell, said: “The London Stock Exchange will be pleased to see that it may have a palpable hit on its hands, even if the deal is not particularly big and the free float is relatively limited.”
Raspberry Pi began trading in 2012 and has since sold more than 60mn single-board computers and computer modules. It expects to sell 8.4mn units in 2024, up from 7.4mn in 2023, according to a registration document.
The Raspberry Pi Foundation, a charity founded in 2008 to promote computer science education for young people, held almost 73 per cent of shares in the computer maker before the IPO. It said it would remain a shareholder.
The low-cost computer maker said its revenues rose to $265.8mn in 2023, with pre-tax profits almost doubling to $38.2mn, according to filings.
British chip designer Arm has committed to buying $35mn of shares in the IPO, building on the 3.4 per cent stake it took last October, according to a registration document published in May. Lansdowne Partners, another existing shareholder, has committed to purchase up to $20mn.
Other significant shareholders in Raspberry Pi include technology group Sony and the Ezrah Charitable Trust, a US-based private foundation that has also donated to the Raspberry Pi Foundation.
Jefferies International and Peel Hunt were engaged as joint bookrunners for Raspberry Pi.
The listing is a rare victory for the London stock market as British companies have increasingly chosen to go public in the US in order to access deeper capital markets and higher valuations. It comes as ecommerce group Shein is also exploring a flotation in the UK.
SoftBank-backed chipmaker Arm, one of Raspberry Pi’s shareholders, listed in New York for a $52bn valuation last September, while FTSE 100 constituents Flutter and CRH have both in the past year opted to move their primary listings across the Atlantic.
Cyber security company Darktrace — one of the few technology groups listed in London — agreed to a takeover from private equity company Thoma Bravo for £4.3bn in April, two years after it first went public.
Source link
