DWF Enjoys ‘Satisfactory’ Main Market Debut
DWF
The U.K.’s latest listed law firm, DWF, has enjoyed a "satisfactory" start to its new life as a public company.
DWF Group Plc officially listed on the main market on Monday (March 11), with an IPO price of 122p. Shares started trading the following Friday (March 15) at 127p, closing at 125p – 3p (1.7 percent) above the offer price.
This gives it a market value of £375 million, some £9 million above its expected £366 million.
Today (March 18), shares opened at 126p, and are currently priced at 125p (9.45am).
John Llewelyn-Lloyd, a broker at Arden Partners, says a “perfect first day’s trading price” is between a 5 to 10 percent premium. And though the firm closed out Friday at 1.7 percent above its offer price, he believes the firm’s debut is “satisfactory”, and provides “a solid basis from which firm can move forward”.
He added: “You don’t want a runaway premium, which suggests you underpriced it. And you also definitely don’t want it falling below the issue price – that would probably mean that there isn’t sufficient interest in the market.
“The key now is for that premium to be sustained over the next few weeks. You can’t establish a practice over night.”
The float of 300,000,000 ordinary shares had been expected to value the business at between £400 million and £600 million, but the firm sharply revised the figure down to £366 million once it listed, owing to what managing partner and CEO Andrew Leaitherland described as “an uncertain market”.
DWF is the first ever law firm to list on London’s premium stock market, and also the first entity to IPO on either of the U.K.’s two major stock markets in 2019.
Two magic circle partners highlighted the challenges DWF faced as both a main market-listed firm and as a part-alternative business structure, contending with a variety of regulatory regimes in the U.K. and its other jurisdictions, such as Australia and the U.S.
The partners agreed that DWF’s float proves that squaring these various regulatory requirements can be done.
