UK firms opting to leave stock exchange jump 40% under Brexit uncertainty

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UK firms opting to leave stock exchange jump 40% under Brexit uncertainty

The number of publicly listed companies opting to leave the stock exchange and become private firms e rose to 28 in 2019 from 20 in the previous year, a 40% increase, as Brexit is making UK firms cheaper.

The value of those deals rose to £21.1bn last year from £9.9bnn in 2018, with private equity firms leading the privatisation wave.

The £4bn buyout of defence group Cobham by US private equity group Advent International was the most high profile deal in a trend that goes back more than a decade for businesses to reject the stock market in favour of private ownership.

Pinsent Masons said UK companies look cheap as their value has been depressed by Brexit uncertainty. "Although there has been an uptick in share prices since the General Election result, listed companies still look very attractive," said Pinsent Masons partner Julian Stanier.

Another factor boosting private takeovers is ultra-low interest rates in the UK and Europe, which make it cheap to fund deals.

Over two thousand companies, with a capitalization of over 3.9 trillion pounds, made up to 818,000 daily trades in December 2019, according to the London Stock Exchange Monthly Market Report. Although this amount is a slight increase compared to the previous month, it is still below 2018 figures, where the average number of daily trades peaked during February of that year and rose to 1.2 million trades.