Earlier this month, the two leading investment crowdfunding platforms in the UK, Crowdcube and Seedrs, announced a proposed merger that would create the dominant online capital formation platform in the UK. Between the two firms, a merger would create not only the top platform in the UK but would better position the new firm to scale and achieve profitability. A combined firm would also create the largest online private equity platform in the world, poised to expand operations further into Europe, and potentially North America and Asia.
Today, Seedrs reports about £985 million in total investments with Crowdcube over £1 billion.
Yesterday, the UK Competition and Markets Authority (CMA), the regulatory body that will review the proposed merger, said it had received a request from the parties involved for a “fast track reference to Phase 2, in accordance with paragraphs 6.61 to 6.65 of the Guidance on the CMA’s jurisdiction and procedure.”
The CMA said it is considering whether the criteria for a fast track reference are satisfied. If the CMA is satisfied that the criteria for the use of the fast-track process are met, the CMA will move more quickly to a Phase 2 investigation.
The CMA explains that in previous fast-track cases, a Phase 1 decision has typically been adopted within 10 to 15 working days of the launch of the merger inquiry, although the duration of a fast-track Phase 1 investigation may vary. A Phase 2 investigation would then last about 24 weeks with a possible extension.
The CMA has invited interested individuals to submit comments pertaining to the proposed merger and if there is any reason as to why it should not move forward.
In line with the CMA’s usual practice in fast-tracked cases, the period for this consultation is said to be relatively short, five working days, as interested parties will have further opportunities to present their views on the proposed merger during the Phase 2 investigation.
The merger, if approved, is expected to close in late 2020 or early 2021. The statutory deadline is December 17, 2020, but a decision will be announced earlier if the fast track request is accepted. The deadline for comments is October 30, 2020.