Two-fifths of CEOs and CFOs of FTSE350 companies would take their companies private given the right opportunity, according to research by financial services firm Close Brothers. The research also reveals that 95 per cent of the listed respondents think it is ‘likely’ the current trend of public companies going private will continue over the next year.

Two-fifths of CEOs and CFOs of FTSE350 companies would take their companies private given the right opportunity, according to research by financial services firm Close Brothers. The research also reveals that 95 per cent of the listed respondents think it is ‘likely’ the current trend of public companies going private will continue over the next year.

Close Brothers chief executive Richard Grainger comments: ‘Secondary buy-out opportunities started running dry last year, forcing private equity groups to look elsewhere for deals, namely public companies. The recent flurry of bids for high-profile quoted companies such as Alliance Boots and Cadbury Schweppes is testament to this.’

In opposition to this trend, 27 per cent of FTSE senior executives would favour a bid from another quoted company over a private approach that was otherwise identical. Significant numbers of respondents still perceive advantages to being publicly owned: 63 per cent think it makes it easier to raise funds, while 36 per cent believe it enables a business to take a longer-term view.

Grainger believes that these views of public ownership are outdated. He says: ‘Public companies are in denial if they believe their business strategies remain longer-term than those of their private equity counterparts. Activist shareholders and quarterly reporting now mean the tables have turned and companies can apply longer-term business strategies under private equity ownership, without the constraints of the public glare.’

Close Brothers, itself a FTSE350 company, has its own private equity arm and runs seven VCTs through Close Ventures.