The Times Online reported this morning that London-based telecom company Spirent plans to ditch its listing on the New York Stock Exchange.
The costs are "disproportionate" to the benefits, according to the CEO, who says listing in the U.S. would cost an estimated 5 million pounds this year -- for which the company gets little or nothing in return. Paying for Sarbanes-Oxley compliance accounts for a large chunk (3 million pounds) of that amount.
To delist, the story says, companies must have fewer than 300 U.S. shareholders, including those who hold options. Spirent does have fewer than 300 U.S. shareholders on the register, but it also employs nearly 1,700 people in the U.S., many of whom have options. Obviously, that issue must be addressed before the listing can be abandoned, but from all indications, the decision to delist has been made.
Spirent is not alone in at least considering quitting the U.S. exchanges, and London has been revelling in the Sarbox effect lately, since the London Stock Exchange's more relaxed listing requirements have helped it snag a significant number of IPOs that may have otherwise come to New York or the Nasdaq.