November 23, 2021 was a landmark day for the London stock market: the unveiling of the first special purpose acquisition company (SPAC) to launch a City float. The bigger picture? It might begin clawing back some of the vast swathes of ground lost to New York during the boom for blank cheque vehicles.

Hambro Perks Acquisition Company, which raised nearly £150m from a swathe of blue-chip investors, was given 15 months to find a merger target - and last month it looked as if it had secured its prize: a combination with Istesso, a developer of drugs designed to treat chronic diseases such as arthritis and multiple sclerosis.

At a time when the UK public markets are crying out for more innovationfocused companies, this looked like a compelling addition to the ranks of London-listed biotech businesses. Moreover, it would have offered a shot in the arm to Istesso's majority shareholder, IP Group, the intellectual property commercialisation-focused incubator.

One banking source said the transaction would have valued Istesso at more than $350m - but within 48 hours of the negotiations being publicly disclosed, both IP Group and the SPAC issued statements to say that they had been terminated.

This should be of concern to stakeholders across the City: those involved in the Capital Markets Industry Taskforce, the body chaired by London Stock Exchange CEO Julia Hoggett, institutional investors and Lord Hill, the Treasury non-executive director who oversaw the 2021 review of the UK listings regime.

Dominic Perks, founder of the eponymous venture investor and chief executive of the SPAC it spawned, said at the time of its intention to float that it had chosen London as its listing venue "because it's the technology capital of Europe".

"The number of unicorns in the UK and Europe has grown significantly over recent years as we have seen a migration of talent and capital to private growth companies," he added. "Investors want to back differentiated, scalable businesses with great leadership, and those are exactly the characteristics we'll be seeking in our target."

Perks' optimism, who declined to comment on the SPAC's plans ahead of its deadline to secure a deal, may, sadly, turn out to have been misplaced.

(c) 2023 City A.M., source Newspaper