Last week, the London Stock Exchange, which is starting the AIM on 19 June, published an initial list of 24 nominated advisers. Companies traded on the AIM must have an approved adviser and a sponsoring stockbroker, which can be any member of the Exchange. Most of the named advisers, which include the accountancy firm KPMG as well as such leading stockbrokers as Credit Lyonnais, Henderson Crosthwaite and Panmure Gordon, have said that their fees would depend on the size and complexity of the company being listed.
Some feared that institutional investors would be frightened off if companies were floated on the AIM after insufficient investigation. Last year, the main stock market's reputation was harmed by a succession of profit warnings by recently floated companies.
Pat O'Reilly, Panmure's head of corporate finance, said: "Institutions we have spoken to are already of the view that they will probably be even more conservative in terms of due diligence and the quality of the presentation of small companies going on AIM than they are for fully listed companies. If they think listing on the AIM will be less onerous, they are sadly mistaken. As for a flat pounds 49,500, if there is insufficient due diligence early on, AIM will be a fiasco and it will not fly."
But Mr Macdonald, whose firm has formed an alliance with the stockbroker Dunbar Boyle and Kingsley, said: "We can fix a fee where we can be adequately compensated on some AIM new issues and technically make a loss on others."
He said the pounds 49,500 was made up of pounds 10,000 for the solicitor, pounds 7,000 for the reporting accountant, pounds 5,000 for the auditor, a pounds 3,500 Stock Exchange fee, pounds 2,500 for public relations, pounds 2,000 on printing and pounds 1,500 for registrars, leaving pounds 18,000 to be shared between Clerk and DBK as adviser and broker. Leading accountancy firms outside the big six have agreed to the reporting accountant's fee, and Mr Macdonald is confident that the other fees will be acceptable to the specialists involved.
But he added: "There will be cases where we will refuse to do a flotation because the investigation might be so horribly complex that it might require a year's work. We will do as much investigation as a company merits."
But the chairman of one of the first companies likely to go on to the AIM said he was "frankly sceptical" of the pounds 49,500 package. Eric Walters, chairman of the Old English Pub Company, said: "We are being advised by Rowan Dartington, and I expect them to give us a hard time in terms of the information they will ask us for. We would never try and save a few pounds when the important thing is to get a good job done."Reuse content