There are now 22 Israeli-related companies listed on the London Stock Exchange (LSE) with a combined market capitalization of about $11.5 billion. These companies have collectively raised $2.42 billion through IPOs and $5.78 billion through follow-on equity capital, underscoring the LSE’s growing appeal to Israeli firms.
One such company, Plus500 initially admitted to the LSE’s growth market AIM in 2013, raising $75 million, and transferred to its Main Market five years later. Since its IPO it has returned to the market six times raising a total of $861 million and its market cap has increased from $200 million to $2.5 billion.
Other companies publicly traded in London include Playtech, Evoke (formerly 888), MTI Wireless Edge, Plaza Centres, XLMedia and Windward.
So what is it about the UK, and London in particular, that is making it so appealing to Israeli firms? “London has always been an attractive city for Israeli companies and now even more so,” says Freeman-Shor, who joined the London Stock Exchange in 2023.
Freeman-Shor explains: “London is Europe’s largest capital market with a deep pool of liquidity and international investors. The London Stock Exchange is also the only European exchange in the global top 10 for equity capital raised so far this year. Investors in the UK understand international companies and are interested in them. This is a big positive for Israeli companies”.
“In addition to this, in July 2024, the biggest reforms to the UK listing rules in 40 years were introduced by the FCA, making London’s Main Market more accessible and attractive than ever before. This includes changes to the requirements for historical financial information, broadening the possible use of dual-class shares, providing a simpler route to dual listings for international listed companies, and making it easier for companies once listed to raise further capital and execute significant mergers and acquisitions.”
Jonathan Morris, partner at BCLP, expects that London “will continue to be attractive to many Israeli and Israel-related companies considering an IPO, particularly as these “once in a generation” capital markets regulatory reforms take effect.”
He said: “London also has easier access to capital and liquidity than the Tel Aviv Stock Exchange and lower barriers to entry than the US markets, as well as greater opportunities for index inclusion.
“It should also be borne in mind that securities litigation is far more common in the US than the UK, so increasing the legal risk associated with an IPO.”
The London Stock Exchange is Europe’s most active equity market, with $24 billion raised in London through IPOs and FOs in 2024 so far. This is more than three times the total raised in Europe’s next biggest exchange in Frankfurt. According to data provided by the London Stock Exchange, London proportionately has more international companies than any other major exchange at 36%, followed by the Nasdaq (20%) and Singapore (18%).
Freeman-Shor, who is based in Tel Aviv and comes to London around once a month, says the London Stock Exchange has several advantages over the US for Israeli companies looking to list, including a diverse investor base (60% of the investor base who invests on the LSE is international, compared to 15-20% in the US), greater flexibility for early investors to sell shares in the IPO, lower listing costs, and less litigation risk. “And when you look at who actually buys the Israeli companies, disproportionately, it’s actually UK investors. “ UK investors want to invest in Israeli tech. People are very excited about it.”
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Prime Minister Benjamin Netanyahu opens trading at the London Stock Exchange, October 2017
Born in Israel, Freeman-Shor studied law in the UK, and returned to Israel in 2021 after nearly three decades in England. Prior to joining the London Stock Exchange, Freeman-Shor was General Counsel at an international investment group and held several senior corporate finance legal positions in England, including, most recently, at Shoosmiths. During these years, she represented companies, funds, and investors on a wide range of corporate transactions, including those involving capital markets, private equity, venture capital, M&A and takeovers with particular focus on cross-border transactions.
Despite the challenges of the past years, Freeman-Shor remains optimistic about the future of business ties between the UK and Israel. A recent report by the UK Department for Business and Trade (DBT) positioned Israel among the top 10 countries for foreign direct investment projects in the UK, per capita, in 2023-2024, among European countries. According to the DBT inward investment results report, 19 Israeli companies either established a presence in the UK or expanded their existing activities across a range of sectors including fintech, healthcare and cyber security, among others.
“We have seen an increasing number of Israeli companies choosing to establish a presence in the UK. The UK is a leading global financial center, with the biggest capital-raising venue in Europe. It is an easier market to penetrate than others because it is usually based on meritocracy, so if you are a good company, it doesn’t matter where you come from, you can truly make a difference and access both UK and international investors. Having some of your workforce in the UK is also a form of risk management, making sure that the company can function well during times of economic or geopolitical volatility, for example as in Israel.
“The UK continues to be a gateway to Europe, the flight between the UK and Israel is short and there is just a two-hour time difference, which makes it very attractive for Israelis who want to keep in touch with their families and their local offices.”
- Article republished with the permission of Jewish News
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