Spanish Mining Firm Abenojar Tungsten Poised for London IPO Amid Big Yellow Takeover Speculation

Spanish mining company Abenojar Tungsten is preparing to list on the London Stock Exchange, a move that could add significant value to the City's flagging IPO market. The company is expected to join the FTSE 250 index with an initial public offering (IPO) valuing it at over £500 million. Confirmation of its fundraising of £150 million to develop the El Moto tungsten mine in central Spain is anticipated as early as tomorrow.

This planned listing follows the recent £5.3 billion flotation of African mobile payments firm Airtel Money, which was the largest listing in London in five years. Abenojar Tungsten, established three years ago by the Garcia San Miguel mining family, is focused on developing the El Moto mine. The project has been designated a strategic asset under the European Union's Critical Raw Materials Act. Construction commenced this year, and upon completion, the mine is projected to produce one-fifth of Europe's tungsten, a critical material for the aerospace and defense industries. The price of tungsten has seen a significant increase since China, which dominates global supply, implemented export controls last year. Approximately 10% of Abenojar Tungsten's shares are expected to be traded in London, with dealings slated to begin the week after next.

The City has experienced a notable decline in new listings in recent years, prompting discussions about its standing as a global financial hub for capital raising.

Pressure Mounts on Big Yellow

Meanwhile, self-storage group Big Yellow is facing increasing calls to explore a sale. Within a 24-hour period, two U.S. activist funds have urged the FTSE 250-listed firm to seek a buyer. A new website, unlockbigyellow.com, has also emerged, highlighting that Big Yellow's shares are trading at a 40% discount to its net asset value. This website was established by advisors to Ancora, the first activist fund to publicly voice its campaign. Ancora, based in Ohio, has held meetings with Big Yellow prior to going public with its strategy. Both Ancora and New York-based Irenic hold a 4% stake in Big Yellow, a leading player in the UK's storage sector.

Big Yellow operates 115 warehouses in London, offering 6.9 million square feet of storage space, with plans to expand this to 7.7 million square feet. However, its share price has declined by 11% this year, attributed to a slowdown in the housing market. The emergence of activist investors and suggestions of a sale have led to double-digit gains in its stock. Big Yellow, structured as a real estate investment trust (Reit) valued at £1.7 billion, has faced similar situations previously. A year ago, property investor Blackstone was reportedly close to a takeover, but negotiations failed over pricing. Ancora claims that Blackstone's previous offer was 50% above Big Yellow's current share price, though this offer was never publicly disclosed. Ancora has identified Blackstone and private equity firm KKR as potential parties interested in acquiring Big Yellow, drawing parallels to KKR's previous unsuccessful bid for the Assura healthcare Reit.

In response to the mounting pressure, Big Yellow stated that it would "continually evaluate all options to maximise shareholder value."