Because once you're on, you're on.
Mishcon de Reya has called off its plan to float on the stock exchange.
"We can confirm that we have decided to put our IPO plans on hold for the foreseeable future due to market conditions", said the firm in a statement. "We remain an ambitious and bold business with a clear strategy and vision for our future."
Although the firm was at pains to emphasise that it has paused - not cancelled - Project Mishcorp, sources told RollOnFriday the market was beginning to lose its appetite for floating law firms.
Some of the UK's other listed firms have encountered problems in recent months which have seen their market values fall. Knights' share price plummeted from a high of 455p a share in March to a low of 92p in May after it informed the market that its performance would not meet expectations due to the impact of the pandemic. It has still not recovered, with the price currently bumping along at around 130p.
Meanwhile, the Ince's share price has plunged to less than 18p. When Gordon Dadds, which was listed, snapped up the collapsed shipping firm three years ago, it was a buy recommendation at 192p. Ince also made a mess after deciding to buy its own nominated advisor, leading to the temporary and unplanned suspension of its shares. Not all listed firms are floundering: DWF shares have bounced back to over 100p after a Covid trough briefly halved their value.
Mishcon instructed JP Morgan after it decided in April 2021 to explore an IPO. The partners, all of whom have equity, voted overwhelmingly in September to proceed, and it had been predicted that Mishcon would become the most valuable listed law firm in the UK.
Management planned to give all staff some shares in the business, though it never specified publicly how large their stakes would be. With the IPO on ice, employees will have to shelve their dreams of riding high on an MdR portfolio.
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Comments
64
47
Once Mishcons were regarded as silver circle. Now they're just a failed Knights wannabe.
69
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Mischon are, always have been, and always will be, a West End firm.
53
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I’m rather surprised the sheer level of self-belief displayed by Mishcons management didn’t lift the entire FTSE to levels that would deliver the valuation god has decided they deserve. They will be very cross at the temerity of the market in Africa House.
60
47
A Knights wannabe? Last time I looked Mishcon were in London rather than Middlesbrough!
57
39
So they announced the IPO plans. All the decent ambitious SAs left and they then shelved it.
Epic Stealth cost cutting or just plain stupid?
41
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"A Knights wannabe?"
A squire, at best.
61
28
Spot on (as a MDR MA looking to escape).
As soon as the IPO was launched, every colleague who wasn't quite senior enough to get promoted to partner had their CV (me included) out there. What was the point?!
79
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I genuinely don't understand why anyone would want to work for a listed firm. It strikes me that the only people that actually benefit are the partners that want to cash out some of their equity stake!
Fortunately I don't see it every happening at my firm, but if it did I would be out of there in a shot - whats the point in striving to make partner when your piece of the pie has already been sold off by the previous generation.
61
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Surely nobody aspires to be Knights. It’s a laughing stock.
Bought any shit firms lately, Dave?
34
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Do Mishcon still ask for monies on account as a policy? Sign of a real big time playa.
37
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How’s MJ Hudson getting on post float?
43
33
Maybe Knights could acquire Mishcon?
Both parties would benefit: Mishcon's senior equity would get to cash in, while Knights would acquire a major London practice.
37
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As if Mishcon would sell to Knights, the only firm to give a profits warning in the midst of a boom period for the rest of the legal services industry. Mishcon is also miles ahead of Knights in terms of quality and profitability.
Gateley on the other hand……
39
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Being a profitable well paying law firm with reasonable rates, and sharing profits with 3rd party investors are diametrically opposed objectives. The only way to offset the loss of profit share to staff is to raise prices on the clients and trim the fat (the support staff). It would make it nigh impossible to keep up with the Associate pay war going on right now, and would make it riskier for lateral hires due to clauses surrounding share allocation and exiting the firm if things didn't work out.
Mishcons has a famously tight equity. Approximately 30 Senior Equity Partners were going to benefit from this, at the expense of over 600 staff (not including clients). Woefully misguided judgement that has already led to the exit of a profitable disputes team, and surely a few more to be announced in the coming months.