Secondary offers

Industry sector analysis

Main Market

Utilities

The best performing sector by funds raised was Utilities, with two fundraisings together bringing in £7,180m (73% of funds raised in the year in Main Market secondary offers):

• National Grid, raised £7bn in an underwritten rights issue to fund significant investment in energy infrastructure, and

• Pennon Group, the water utility and waste management company, raised £180m in a placing and retail offer in connection with an acquisition (and the company subsequently launched a £490m rights issue in January 2025)

This sector also performed well in 2023 with £1bn raised by Severn Trent (20% of funds raised that year).

Property

The Property sector saw significant fundraising activity in 2024, with eight REITs raising £2,376m (24% of funds raised in the year):

• Segro, a REIT focussed on warehouses and industrial property, raised £907m in a placing and retail offer to fund growth,

• British Land Company raised £300m in a placing and retail offer to part fund an acquisition of seven retail parks,

• Unite Group raised £450m in a placing and retail offer to fund student accommodation acquisition and development projects,

• Great Portland Estates raised £350m in a rights issue to take advantage of new acquisition and development opportunities in central London commercial real estate,  

• Empiric Student Property, which owns and manages purpose-built student accommodation, raised £56m in a placing and retail offer to fund the acquisition and refurbishment of properties,

• Sirius Real Estate, which owns and operates business parks, offices and mixed-use workspaces in Germany and the UK, raised £152m to fund its acquisition strategy,

• NewRiver REIT raised £50m to part fund its takeover of Capital & Regional, and

• Regional REIT raised £111m in a placing and open offer to redeem a retail bond and reduce bank facilities – the fundraise was at a 50% discount to the share price and was not received well by the market

This represents a substantial increase in activity in the sector compared to previous years: in 2023 four REITs raised £582m in aggregate (12% of funds raised) and in 2022 five REITs raised £882m (24% of funds raised).

Retail

2024 saw two fundraisings in the Retail sector raising £125m in aggregate. This included the oversubscribed placing, subscription and retail offer by THG which raised £95m to facilitate the demerger of the group’s Ingenuity division. THG had previously raised £743m in a fundraise in 2021.

Automotive

Aston Martin Lagonda Global Holdings came back for another fundraise in 2024, this time raising £111m in a placing and retail offer (alongside a debt issuance) following the issue of a profit warning. The company previously raised £216m in a placing in 2023, £654m in a rights issue and placing in 2022 (the largest fundraise that year) and £365m in a rights issue in 2020.

Fundraising structure

Placings

As with previous years, the most popular fundraising structure for 2024 was a non-pre-emptive institutional placing and 48 secondary offers out of a total of 50 (96%) within our data set raising £10m or more for the company used a placing as the main part of their fundraising. This was up from 92% for 2023.

On the Main Market in 2024:

• 15 secondary offers out the total of 17 used an institutional non-pre-emptive placing as the main part of the fundraising structure (the other two were rights issues)

• 10 out of the 15 secondary offers featuring a non-pre-emptive placing also included a retail offer: one company undertook an open offer and nine companies undertook a retail offer though an investor platform

• In total, 12 out of the 17 Main Market secondary offers (within our scope) had a retail element to their fundraisings (which includes retail offers through investor platforms, open offers and rights issues)

On AIM in 2024:

• all secondary offers within scope used an institutional non-pre-emptive placing as the main part of the fundraising structure

• 15 out of 33 companies undertaking an institutional non-pre-emptive placing, also made a retail offer: 13 companies added a retail offer through an investor platform, one company made an open offer and one company made both an open offer and a retail offer through an investor platform

 Cash box placings

Only one cash box placing within our dataset was observed in 2024, by AIM traded Mulberry Group.

Companies tend to use a cash box structure where they have insufficient pre-emption disapplication authority as a cash box placing involves issuing equity securities for non-cash consideration and avoids the need to disapply pre-emption rights.

The Pre-Emption Group (PEG) issued a revised Statement_of_Principles in November 2022 which provides that a company may seek annual shareholder authority to issue equity securities for cash on a non-pre-emptive basis for up to 20% of its issued share capital (up from 10% under the previous PEG guidance). Given that companies now have the ability to issue an increased percentage of their issued share capital non-pre-emptively, it was anticipated that cashbox structures would decline in popularity.

In 2023, 13% of all placings (within our dataset) on the Main Market and AIM were structured as cashbox placings and a similar proportion was seen in 2022.

Rights issues

There were two fully underwritten rights issues on the Main Market in 2024: National Grid and Great Portland Estates.

Two companies undertook rights issues in 2023, TUI AG and Synthomer, with only one observed in 2022, by Aston Martin Lagonda Global Holdings.

The amount raised in rights issues in 2024 represents 74% of all funds raised in Main Market secondary offers (within our scope). This compares to 37% in 2023 and 15% in 2022.

As in previous years, there were no rights issues on AIM as the cost involved is prohibitive for the typical size of companies traded on AIM as it usually requires the publication of a FCA approved prospectus.

 Open offers

The Main Market saw one open offer in 2024 by Regional REIT which undertook an underwritten placing subject to clawback under an open offer. The company raised £111m in total of which £80m was raised in the open offer and prepared a simplified prospectus.

2024 saw four AIM companies make a small open offer in conjunction with a non-pre-emptive placing:

• Hummingbird Resources plc, a gold production and development company, raised £22m in a placing and open offer,

• Tinybuild, Inc, the US-based video games publisher and developer, raised £10m in a placing, subscription, private placement and open offer,

• Polarean Imaging plc, a medical imaging technology company, raised £10m in a placing, subscription and open offer, and

• Faron Pharmaceuticals oy, a clinical stage biopharmaceutical company, raised £27m in a placing, open offer and retail offer in Finland and the UK

The total consideration under each of the AIM open offers was under €8m which ensured that an exemption from the requirement to produce a prospectus could be utilised.

Other retail offers

In 2024, 22 out of the 50 secondary offers within our scope (44%) included a retail offer through a retail investor platform: nine out of 17 on the Main Market (53%) and 13 out of 33 on AIM (40%).

The use of retail investor platforms for retail offers alongside non-pre-emptive placings has gained popularity over recent years.In 2023, 43% of secondary fundraisings (within our scope) included a small retail offer (13 on the Main Market and 9 on AIM) and in 2022 it was 24%.

This follows the revised guidance issued by PEG in its Statement_of_Principles (November 2022) providing that companies issuing equity securities non-pre-emptively for cash pursuant to a general disapplication of pre-emption rights should give due consideration to whether retail investors and existing investors not allocated shares in a placing should be enabled to take part in the fundraise through a retail investor platform or a follow-on issue. It also follows recommendations in the UK Secondary Capital Raising Review (SCRR) that retail investors should be provided with the opportunity to participate in an offer where this is appropriate.

A number of different retail investing platforms have been launched which enable retail investors to participate in capital markets transactions. Most small retail offers in 2024 were made through PrimaryBid (11) but a growing number were made through other platforms such as REX/RetailBook, BookBuild, and Winterflood (WRAP).

Currently, the value of securities offered under all retail offers by a company in a 12 month period must be below €8m in order for it not to trigger a requirement for the company to produce a prospectus and this is one of the factors which means that amounts raised under retail offers have been low.

Under the proposals for reform of the UK public offers regime, the figure of €8m will no longer act as a cap on the size of an offer to the public. The FCA has been given power to decide when a prospectus is required and in Consultation Paper CP24/12, the FCA states that it does not consider there is a strong rationale for retaining prospectus requirements for further share issues unless the issues are of a scale or nature that mean that existing continuing obligations for issuers may not give clear information about their current situation and prospects. The FCA asked for feedback on, among other things, whether to raise the threshold for triggering the requirement to publish a prospectus for further issues of securities already admitted to trading on a regulated market to 75% of existing share capital. This was the threshold suggested in the SCRR.