12th Nov 2020 16:00
(Alliance News) - The UK Competition & Markets Authority on Thursday said it has agreed to fast track the anticipated merger of a Schroder UK Public Private Trust PLC portfolio company, Seedrs Ltd, with Crowdcube Ltd to an in-depth phase 2 investigation.
The fast track comes after the CMA found "likely competition concerns", noting that Crowdcube and Seedrs are the UK's two largest equity crowdfunding platforms.
The fast track was requested by the merging companies last month. Most of the time, a full phase 1 investigation is needed to determine whether a deal will be cleared or needs further scrutiny, but companies can ask for a quicker move to phase 2 in cases "where it is clear from an early stage that there are competition concerns that require an in-depth investigation".
By requesting the fast track, the merging companies waive their right to offer undertakings or formal commitments to address CMA concerns and avoid phase 2.
Andrea Gomes da Silva, executive director of Markets & Mergers, said: "Crowdcube and Seedrs are well-known names in the equity crowdfunding world and are two of the biggest platform providers in this market. Their services are used by thousands of investors and businesses, particularly early stage start-up SME businesses that tend to have limited options for raising investment. We've found a real risk that the merger could lead to less choice for SMEs and investors.
"The companies recognised that the issues in this case are complex and that the test for reference at phase 1 was likely to be met. They therefore requested use of the fast track procedure and, after due consideration, we believe this to be appropriate."
Shares in Schroder UK Public Private Trust were up 3.8% at 28.02 pence in London on Thursday afternoon.
By Anna Farley; [email protected]
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