Breaking: CMC Markets Valued at £700 million after IPO

CMC Markets shares have been placed at 240 pence per share, which is closer to the bottom of the range.

After years of speculation about an upcoming IPO, online spread betting and CFDs trading brokerage CMC Markets (LON:CMCX) is now officially listed on the London Stock Exchange. The company’s shares have been priced at 240 pence per share. The valuation is closer to the bottom line of the IPO guidance which was between 235 and 275 pence per share.

At this price the valuation of CMC Markets comes to about £691 million ($1 billion). The online brokerage has raised about £218 million, including a £15 million ($21.8 million) primary capital raise and £203 million ($295 million) of secondary shares. The company sold 90.6 million ordinary shares, which comes to about 31% of CMC’s issued share capital on admission to trading on the London Stock Exchange.

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The shares which were on offer have been sold by CMC’s Markets main shareholders, Peter and Fiona Cruddas and Goldman Sachs Strategic Investments (UK) Limited. Morgan Stanley & Co. has been granted an over-allotment option totaling to about 13.6 million ordinary shares, which is to be exercisable for up to thirty days after February the 5th.

Peter and Fiona Cruddas remain the controlling shareholders after the IPO with 62.5 per cent of the shares of CMC Markets, while Goldman Sachs holds 4.99 per cent.

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The promotion which CMC Markets launched for its clients who were given given the option to purchase shares of the brokerage has been allocated in full. The ticker of the company on the London Stock Exchange is CMCX.

The company’s CEO Peter Cruddas commented after the allotment: “We have been very pleased with the response of investors to the offer and thank them for the strong interest they have shown. We are delighted to have our customers as shareholders as well as a core of high quality institutions who we believe will be long-term supporters of the business.”

“Our performance since the start of 2016 continues to be strong, helped by the ongoing market volatility, and we start our life as a public company well-positioned for continued growth and to deliver value for all of our shareholders,” he added.

The latter statement confirms the persisting chatter around the industry that the year is off to a great start for foreign exchange trading businesses. After a surprise decision by the Bank of Japan last Friday to cut rates into negative territory, an implosion of volatility in Japanese yen pairs has sent trading volumes through the roof.

This week, the foreign exchange market was focused on Federal Reserve officials commenting about their outlook for the likely path of interest rates and a mis-pricing of the yield curve has triggered a broad U.S. dollar selloff.

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