The shortcomings of the Alternative Investment Market (Aim), have become ever more apparent since the onset of the economic downturn. In short, small-caps (or growth companies as they generally prefer to be known) have suffocated since the crisis started as investors who were once prepared to take a risk have decamped to the perceived safety of the FTSE.
Meanwhile, the London Stock Exchange has come under pressure from a number of bosses of small caps that have delisted, who have argued that Aim is no longer fit for purpose and that for more than just the tiniest, maintaining a listing, in these conditions, is just too expensive.
So you have to hand it to the LSE for trying to maintain credibility, if nothing less. The exchange, along with the law firm Eversheds and City Insights, "the provider of private client investor relations services", is arranging a series of regional investor meetings to try to spark some enthusiasm about smaller companies in the provinces. A spokesman says the meetings are a chance for small-caps to communicate with investors, and that while this is the first time that the LSE has arranged such events, it is always working on new ways to drum up enthusiasm.
Cynics may say that it is a case of desperate times calling for desperate measures, and of course, all the organisers have a financial interest in seeing a successful Aim.
Whether investors away from the City will be impressed remains to be seen. The LSE spokesman could not say how many investors have been invited to attend the events, but it might be a difficult trick to convince them to put their money into companies that others have already expressed a dose of scepticism about.
Tapping into China's domestic tourism boom
Et-China, the Aim-listed group that specialises in providing flights, hotels and tours in southern China, has had a tough year. Pre-tax losses widened when it reported its full-year results last September, and its shares have dropped nearly 70 per cent in the last 12 months. Severe weather, the earthquake in Sichuan and heightened security measures for the Beijing Olympics have all hindered the group.
The broader outlook is much better, however, and with the Chinese government extending the list of places that ordinary Chinese can visit, including in the last year the United States, Et-China is hoping to tap into an expected surge in demand for travel.
To help it on its way, the company announced last week that it has bought Yoee.com, a Beijing-based online travel company specialising in air tickets. Et-China reckons that the deal will give it access to the pan-Chinese market, rather than concentrating on southern China. The merger will also create China's third biggest online travel operator.
Sintec and Pilat find a way to seal the deal
Merger deals are all complicated, with the due diligence on even the smallest deal seemingly taking forever. Cross-border deals are even more complex. The filings needed to satisfy the requirements of two different regulators, sometimes in two languages, can be so bureaucratic they eventually scupper some transactions.
Not the deal between SintecMedia and Pilat Media, however. While the talks have indeed been complicated, with Pilat listed on both the Alternative Investment Market and in Israel, the two companies announced a deal last week. Pilat has accepted a £16.3m approach from Sintec, sending the shares up a whopping 87 per cent.
Both groups produce clever software that allows media companies to track who uses their broadcasts, as well as when and how much. Sintec's offer represents a 104 per cent premium to Pilat's closing price on 10 March, and while that might seem generous, even taking account of the charge in the share price last week, the stock is still worth a little more than half what it was this time last year. Once the bureaucracy is out of the way, in other words, Sintec may be getting a bargain.Reuse content