Temasek-backed Covid-19 test provider Oxford Nanopore plans $877.5m London IPO

Oxford Nanopore specializes in DNA-sequencing technology. PHOTO: OXFORDNANOPORE/INSTAGRAM

LONDON (BLOOMBERG) - Oxford Nanopore Technologies, a provider of Covid-19 test kits to Britain's National Health Service, is planning an initial public offering that could raise as much as £476 million (S$877.5 million).

The deal values the company, a University of Oxford spin-off, as high as £3.8 billion, putting it among Britain's most valuable start-ups, according to terms seen on Thursday by Bloomberg. It also marks a win for London's efforts to keep promising tech businesses at home.

The company, which counts Singapore's Temasek among its shareholders, seeks to raise £350 million to fund growth, according to the terms. Existing investors will sell as much as £126 million in stock. The shares will be marketed at 375 pence to 450 pence each through Sept 30, and start trading the next day.

Oracle will become a key backer of Oxford Nanopore, which specialises in DNA-sequencing technology, used by researchers studying virus variants. In turn, Oxford Nanopore plans to use Oracle's cloud computing system.

The biotech firm has also adopted a controversial equity structure designed to give founders a special class of shares with extra power to block an unwanted takeover. Company founder and chief executive Gordon Sanghera will receive what is known as limited anti-takeover shares.

The unequal distribution of voting rights means that Oxford Nanopore will be ineligible for inclusion in the FTSE stock indexes. Some analysts say the structure helps London compete with New York in attracting innovative founder-led start-ups, while a number of institutional investors say the system erodes shareholder rights.

If there is enough demand, underwriters can sell additional shares, which increase the size of the offering to as much as £547 million.

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