Balls blames the London Stock Exchange for the lack of UK listings

For years, Christmas on the London Stock Exchange was the season of takeover bids.

Dame Clara Furse, who was in charge of the LSE in the 1990s, fended off five predators in eight years. Much of her struggle interrupted what should have been her festive holidays.

There is no bid this Christmas, but if attention is paid to former Labor Shadow Chancellor Ed Balls there may be one soon.

He has called for the breakup of the London Stock Exchange Group – the company behind the world's oldest stock exchange – a move that could open the door to another takeover by a rival such as Germany's Deutsche Boerse or America's Nasdaq.

Balls, who was a political heavyweight under Gordon Brown, has since become better known for his appearances on Strictly Come Dancing.

In his Political Currency podcast, he launched a scathing attack on the London Stock Exchange Group, telling listeners that the company is not fit for purpose after turning itself into a data company.

He said the exchange part of the operation has become a neglected afterthought compared to the much larger data division. As a result, he argued, it was harder to attract new companies to the UK stock market.

Balls said: 'Less than 4 per cent of the London Stock Exchange Group's revenue comes from listing and trading cash shares in London.

'It has fundamentally changed from a company that runs a stock exchange to an international data analysis company that trades around the world in a completely different specialty.

'Two-thirds of their turnover comes from data analysis. The question is: are they the right people to run the London Stock Exchange?'

In the event of a breakup, the exchange portion of the company would be split from the group and become a standalone entity. As such, it would be a tempting morsel for a bidder.

The comments are a blow to the London Stock Exchange Group, which has come under fire this year after a slew of well-known companies decided to move to New York.

The most notable loss was Arm, which floated on the Nasdaq despite only being listed in London in 2016.

The decision has increased pressure on group director David Schwimmer and exchange boss Julia Hoggett, who have so far failed to turn the situation around despite planned changes to the listing rules.

Before the time of Margaret Thatcher, the London Stock Exchange was a backwater for a handful of sleepy industrial giants and former schoolboy money managers.

Then in 1986 came the reforms known as the Big Bang, which opened the door to foreign capital and investment banks.

This transformed London into a global financial center. In recent years, the London Stock Exchange Group has acquired data companies, including Reuters unit Refinitiv, which it bought for £21 billion in 2021.

The acquisitions are partly a response to three takeover attempts by Deutsche Boerse – the most recent of which was filed in 2016 but blocked by European regulators the following year.

Balls added: 'If I were Jeremy Hunt I would ask myself: do we now have owners of the London Stock Exchange who are a global business but have effectively decided that the stock exchange itself is not really a priority for them and only a minor is part? of their company.

'It matters that people want a listing on the London Stock Exchange and you want an owner who thinks this is a central part of their business.

“I think other exchanges around the world have owners who make it their priority. Our problem is that this is no longer a priority for the London Stock Exchange Group.”

Other companies that have listed or launched a secondary listing in New York this year include CRH, Ferguson and Flutter.

Two weeks ago, commodity trading house Marex announced it would list on the US stock exchange. Investors in Pearson have called on the education giant to do the same.

The performance of the London Stock Exchange is in stark contrast to that of the New York stock exchanges, whose marketing teams have persuaded some of the UK's top companies to come to the Big Apple.

Senior executives, including Karen Snow, global head of listings at Nasdaq, and Cassandra Seier, head of capital markets at the New York Stock Exchange, are said to have a constant presence in London. Their hard work has clearly paid off. A spokesperson for LSEG said: 'London Stock Exchange is an important part of the group and it is wrong to suggest otherwise.'