AIM stocks suspended after deal warning

A crackdown on companies that have done nothing since raising money on the Alternative Investment Market (AIM) today led to 38 stocks being suspended.

The firms missed a deadline for completing at least one deal and were unable to convince stock market authorities that they had made major progress with their investment strategies.

AIM bosses targeted companies that listed on the market before April 1 last year and raised less than £3m (€4.3m) at the time of flotation.

The companies, which had a combined value of £54m (€77m) before today, now have six months to finalise a deal or face ejection from the stock market completely.

Founded in 1995, AIM is favoured by small firms because it is not as stringently regulated as the main market of the London Stock Exchange.

This allows them to keep costs down and AIM has proved a breeding ground for firms in new technologies that need time to convince investors of the merits of their business model.

Among the biggest firms listed on the AIM market are Paradise Poker owner Sportingbet, which is valued at £1.58bn (€2.3bn), and online money payment firm NETeller – worth £881.6m (€1.3bn). Neither company is involved in the crackdown on firms who failed to seal deals.

The crackdown swept up Quintessentially English which joined the market in 2004 as a cash shell with a plan of acquiring businesses specialising in language teaching both at home and abroad.

At the time, the firm said it wanted to buy companies such as schools teaching English as a foreign language and operations training staff to work in call centres, particularly in India.

But two years on and the company has yet to put pen to paper on any deals, although Quintessentially English said today that it was currently “reviewing a number of potential acquisition targets”.

Other firms to have their shares suspended today include GruppeM Investments, which is seeking opportunities in property and motor retailing in China, and pharmaceuticals investor Isis Resources.