Many smaller British firms regret listing -poll

LONDON Dec 16 (Reuters) - Many of Britain's smaller listed companies, frustrated by low stock prices, may consider private equity buyouts, and a third wish now wish they had never floated to start with, research released on Tuesday showed.

The survey, by accountants BDO Stoy Hayward, suggests so-called "mid-market" buyout houses may enjoy a busier 2009 than larger private equity firms, whose mega-buyouts have ground to a halt as banks stopped providing big leveraged loans.

BDO found 69 percent of companies with a market value of less than 250 million pounds ($381 million) felt their stock was undervalued, and 32 percent were "fairly" or "very likely" to consider a public-to-private deal within the next few years.

"Our survey is further evidence that a majority of smaller quoted companies are very frustrated about their place on the public markets," said BDO Corporate Finance Partner Michael Cobb.

"A significant number of directors feel that it is in their company's best interest to explore coming off the market and obtaining private equity funding," he said in a statement.

Other considerations may also play a part: 66 percent of respondents said the private equity funding model, which can lead to equity stakes and hefty payouts for managers, is "generally better than the public markets at incentivising management".

As the credit crunch intensified, the FTSE-250 index .FTMC has fallen more than 40 percent this year while the FTSE Small Cap index .FTSC has lost almost half its value. In the year-to-date, global private-equity mergers and acquisitions (M&A) have slumped 70 percent, according to Thomson Reuters data, against a 28 percent slide in overall M&A.

The BDO survey, conducted in September and October, was based on interviews with 86 companies with a market value of 15 million pounds to 250 million pounds.