Wise to opt for dual-class structure IPO according to reports

Wise (the fintech formerly known as TransferWise) is said to be following in Deliveroo’s footsteps by offering a dual-class share structure for its hotly-anticipated float on the London Stock Exchange (LSE), according to Sky News.

The fintech, which is expected to float on the LSE later on this year, is reportedly drawing up plans to keep the control of the company in the hands of its founders and early investors.

According to City sources, Wise will opt for a dual-class share structure to ensure that early investors and its founders don’t miss out on reaping the rewards of its listing.

Earlier this year it was reported that Wise had appointed Goldman Sachs and Morgan Stanley to steer it through its LSE float.

The option was made possible by the recent review into how companies list on the LSE by Lord Hill.

Lord Hill’s review suggested measures to bring the LSE more in line with its American rivals in the hopes of attracting more companies to list here in London, rather than across the pond on the NASDAQ or New York Stock Exchange. 

Alongside offering dual-class share structures on the LSE, Hill’s review also suggested reducing the free float requirements in an IPO and a review of the prospectus requirements on companies were among Hill’s recommendations to the Government.

Hill’s suggestions were not dissimilar from those laid out in the Kalifa review, which looked at the whole fintech sector as a whole. 

Kalifa also suggested a reduction in free float requirements will be reduced, meaning companies no longer have to issue at least 25 per cent of their shares to the public at any one time, rather they will just have to offer ten per cent. 

As well as implementing dual share structures that are more favourable to entrepreneurs, meaning they will be able to maintain control in their companies.

TransferWise’s float will make it one of the first of the fintech giants to go public, following in the footsteps of the likes of Funding Circle and Augmentum Fintech, with others planning to float in the not-too-distant future, such as Starling, which is heading for a 2023 IPO, and PensionBee, which announced its intention to list on the LSE late last year.