‘Golden shares’ tactic to prevent Kraken swimming for US shores

Last week the UK government took a leaf from the business rulebook of Donald Trump. The unprecedented decision by the British Business Bank (BBB) to invest £25m in Kraken, the software arm of Octopus Energy, looks strikingly similar to the Trump administration taking “golden shares” in five US public firms including Intel and US Steel.

For Trump, it’s about exhibiting strength, part of a series of remarkably un-capitalist interventions, including banning share buy-backs for defence companies. But for the UK, it betrays a weakness.

Amid anxiety that homegrown UK success stories are listing overseas, the business secretary, Peter Kyle, told the Financial Times that the investment – amounting to a publicly financed 0.35% stake in the £6.45bn company – is “not a bung”.

He did acknowledge, however, that it was part of efforts to keep Kraken in the UK.

The founder of Octopus, Greg Jackson, has said it was a “coin toss” as to whether Kraken listed in London or New York.

For British companies, the lure of listing in the US is partly down to the higher valuations on offer. But this doesn’t guarantee results.

“Performance for international businesses that do list in the US is mixed over the longer term,” said Sam Kerr, global head of equity capital markets at Mergermarket.

If foreign companies that list in the US begin to underperform, there is a risk their share price will languish without a core group of local shareholders who know the business. Just nine companies listed on London’s main market in 2025, and UK IPOs are below the historical average, down from a total deal value of £5.1bn in 2016 to £1.8bn in 2025, according to data from Dealogic.

A number of new candidates are “merely balancing out those which are leaving”, according to Rob Newman, a partner at DLA Piper. He notes that Aim, a sub-market of the London Stock Exchange, “now has circa 650 companies, compared to 815 in 2022”.

Brexit is partly to blame. Leaving the European Union created an impression that the UK was closed to international business, meaning, said Kerr, there is “a challenge of reinvention”.

Labour policies in government have rattled confidence too. These include scrapping non-dom status and requiring foreign nationals to pay inheritance tax on assets held overseas.

Yet there are some signs of a revival, including a 21.5% annual return for the FTSE 100 in 2025, its strongest performance in years, driven in part by a rise in the valuations of mining firms as the price of gold and other metals soared.

There was also a flurry of IPO activity at the end of last year, including Princes Group and Shawbrook.

In Davos last week, Rachel Reeves declared, stony faced, that Britain is the “best place in the world to invest”. This is overegging it, but investors are cautiously optimistic.

Last week the chancellor announced new measures to allow companies to raise more capital without issuing new prospectuses, a time-consuming and expensive process.

That announcement followed the introduction of multiple-class share structures – in which some shareholders have enhanced voting rights – aligning with the system in the United States.

In her budget, the chancellor also announced a three-year stamp duty holiday for UK company IPOs.

“There is very little friction now to doing a London listing,” said Kerr, adding that amid geopolitical turbulence, London may become the international exchange of choice for businesses that do not want to list in the US.

In addition to the boom in metals, pledges by the UK and other European countries to increase military spending boosted the valuations of defence stocks, while concerns about overconcentration in US tech have encouraged inflows into Europe.

Imitating Donald Trump is not a habit to get into. The BBB’s stake in Kraken is an expensive undertaking and it won’t actually control the listing decision. It also arguably stretches beyond the bank’s remit to invest in smaller companies.

But it is, as Jackson says, “a seat at the table”. That may be just what Britain needs.

Photographer: Zed Jameson/Bloomberg via Getty Images